President Donald Trump said on Tuesday that the government would maintain its implicit guarantees for Fannie Mae and Freddie Mac, even if it moves forward with plans to take the mortgage giants public.
Fannie Mae and Freddie Mac are government-sponsored entities that provide liquidity, stability, and affordability to the U.S. housing mortgage market,
according to the Federal Housing Finance Agency (FHFA), which regulates the entities. The companies have been placed under government conservatorship since the 2008 financial crisis.
Trump said the two mortgage giants provide a “vital service” to the nation and that the government will retain oversight of them, even as it relinquishes control by taking the entities public.
“I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” he stated in a Truth Social
post. “These Agencies are now doing very well, and will help us to, MAKE AMERICA GREAT AGAIN!”
Trump said last week that he would consult with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and FHFA Director William Pulte before making a final decision on privatizing the companies.
“I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public,” he said. “Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right.”
Taking the companies public would likely involve ending the government conservatorship. The Treasury Department holds preferred shares in the companies and warrants to purchase about 80 percent of their common stock, according to a 2021
statement.
Bessent
told Bloomberg in February that the release of Fannie Mae and Freddie Mac from the government conservatorship would depend on the implications of mortgage rate trends.
“The priority for a Fannie and Freddie release, the most important metric that I’m looking at, is any study or hint that mortgage rates would go up,” Bessent said. “So anything that is done around a safe and sound release is going to hinge on the effect of long-term mortgage rates.”
Trump had attempted to end government control of the mortgage giants during his first term, but the effort was unsuccessful.
Jacob Burg contributed to this report.
