WASHINGTON — President Donald Trump last week ordered government-sponsored mortgage giants Fannie Mae and Freddie Mac to purchase a combined $200 billion in residential mortgages, a move the administration says is aimed at supporting the housing market and expanding access to credit.
On the same day Trump made the announcement, mortgage rates dropped below 6% for the first time in years (see related story).
The directive, issued through the White House and the Treasury Department, instructs the two firms to step up acquisitions of newly originated and existing home loans over the coming months. Administration officials said the purchases are intended to increase liquidity in mortgage markets and help stabilize borrowing costs for homebuyers amid elevated interest rates and affordability pressures.
$3 Billion Spent
“This action will help ensure Americans can access mortgage credit and support a strong housing market,” the White House said in a statement.
FHFA Director Bill Pulte said on Friday Fannie and Freddie have already started to make the purchases. “We put in a $3 billion buy already,” he said.
As the CU Daily has reported, both companies have operated under federal conservatorship since the 2008 financial crisis.
Details Not Released
Details on how the $200 billion would be allocated between the two firms, the types of loans targeted, and the timeline for the purchases were not immediately released. It was also unclear whether the order would require changes to existing caps or policies set by their regulator, the Federal Housing Finance Agency, analysts said.
Housing and finance analysts said large-scale purchases by the two companies could help support mortgage availability, but cautioned that the impact on rates and affordability would depend on broader economic conditions, including inflation and Federal Reserve policy.
The order comes as the administration continues to emphasize housing affordability as a key economic issue, with home prices and borrowing costs remaining well above pre-pandemic levels in many parts of the country.
