President Donald Trump announced on social media that he was instructing Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds, saying that doing so will drive rates and monthly mortgage payments down.
Trump said he was issuing the order because Fannie Mae and Freddie Mac, the two government-sponsored mortgage-issuing entities, are flush with cash. FHFA Director Bill Pulte posted on X later that “We are on it. Thanks to President Trump, Fannie and Freddie will be executing.”
In the hours before Trump’s post on Truth Social, Pulte said in an interview on CNBC that he expects Trump will make a decision in the next month or two on a possible initial public offering of Fannie and Freddie.
MarketWatch reported, however, that Trump’s directive for Fannie Mae and Freddie Mac to buy the mortgage securities seemingly would spell the end to the idea that the agencies would go public again in massive initial public offerings. Trump’s social-media post implicitly suggested he wants to keep the pair under the conservatorship they’ve been in since the global financial crisis of 2008-09.
The Fed has Bought Mortgage Before
The Federal Reserve in the past has bought mortgage bonds in an effort to lower rates, as part of the monetary policy known as “quantitative easing,” CNBC reported. The executive branch cannot order the independent central bank to initiate those transactions, however.
The Treasury also has purchased mortgage bonds in the past during times of extreme turmoil, such as the housing crisis of 2008 and 2009, CNBC said.
The Fed’s quantitative easing typically involves buying multiple types of securities, with larger amounts done in Treasuries in order to lower long-term Treasury rates, CNBC noted. Mortgage rates usually follow the lead of long-term Treasury rates, rather than mortgage bond yields, the network said.
The 10-year Treasury yield ticked slightly lower after hours amid Trump’s comments.
Trump Announces Other Affordability Initiatives
MarketWatch noted that Trump’s social media post came one day after he announced plans to roll out a slate of housing affordability measures ahead of the 2026 elections. Trump also announced that he was planning to work with Congress to ban institutional investors from purchasing single-family homes.
According to MarketWatch, industry analysts agree that the large purchase should lower mortgage rates, but they said it’s not the most effective method.
Michelle Parkinson, AD Mortgage Senior Vice President of Capital Markets, said the president’s order could offer short-term help to homebuyers.
“In the short-term, the increased demand lowers rates, which will help homebuyers afford the high home prices. Long-term, if this is a one-time purchase, rates will adjust back to normal ranges depending on the economic landscape at that time. The administration instructing Fannie and Freddie to buy mortgage bonds is just one initiative in the quest to lower mortgage bonds for a substantial period of time.” Parkinson said.
Michael Bright, CEO of the financial services industry group Structured Finance Association, said in an interview that a $200 billion purchase “lower rates by a little bit,” but that it exposes Fannie and Freddie to serious risks if the market turns.
“It exposes them to the exact same risks that got them blown up” in 2008, Bright said.
