President Donald Trump’s plan to maintain government control over Fannie Mae and Freddie Mac, the two dominant mortgage financiers, has sparked confusion among lawmakers and experts. The proposal aims to keep the companies under government authority while preserving an implicit federal guarantee for their solvency.
The plan contradicts expectations that Trump would back off from government involvement in the housing finance system. GOP lawmakers and the mortgage industry are questioning why the administration is keeping significant sway over Fannie and Freddie, which were seized by the Bush administration during the financial crisis.
Some lawmakers, including Sen. Mike Rounds (R-S.D.) and Rep. Andy Barr (R-Ky.), expressed skepticism about privatizing the companies. Democrats fear that doing so would destabilize the market and push up mortgage rates.
At stake is a potential windfall of hundreds of billions of dollars for the administration, which faces massive fiscal deficits. The government holds a roughly $340 billion liquidation preference for Fannie and Freddie.
The Federal Housing Finance Agency’s director, Bill Pulte, will meet with Treasury Secretary Scott Bessent and Securities and Exchange Commission Chair Paul Atkins to discuss the future of Fannie and Freddie on June 17. Experts are unsure what a scheme to take the companies public while keeping them in conservatorship would look like.
Some analysts have questioned whether investors would be attracted to purchasing shares in conservatorship, given the government’s ongoing ownership stake. “The direction of that control can change at the next election,” said an anonymous analyst.
For now, Republican lawmakers are waiting for more details about the administration’s plans. The proposal has sparked controversy, with many experts and stakeholders questioning whether it is a viable strategy for Fannie and Freddie.
Source: https://www.politico.com/news/2025/06/15/trump-housing-fannie-freddie-mortgage-treasury-00403780