U.S. Sens. Elizabeth Warren, Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, and Minority Leader Senator Chuck Schumer, have led 14 Democratic Senators in a letter to Federal Housing Finance Agency (FHFA) Director William J. Pulte, raising concerns about the Trump administration’s recent discussions about reprivatizing Fannie Mae and Freddie Mac.
In the letter, the coalition of senators voice many concerns regarding having Fannie Mae and Freddie Mac going public, specifically that the move could dramatically raise housing costs for millions of Americans while delivering a windfall to wealthy investors.
“Given the seismic change this decision represents and the concerns it raises about the stability of our nation’s housing and financial markets, we write to ask that [FHFA] pause efforts to reprivatize or otherwise alter the Enterprises, including relisting their common and preferred stock.” wrote the senators. “Economists have warned that reprivatizing the Enterprises could have disastrous effects on the mortgage market, driving up costs for homebuyers even further. For example, some experts have estimated that mortgage rates could increase by up to 1% in the first year of privatization alone.”
Fannie Mae and Freddie Mac help provide stability and affordability to America’s home mortgage market, and the National Association of Realtors (NAR) reports that Fannie and Freddie support approximately 70% of the U.S. mortgage market.
In 2008, the FHFA exercised its statutory authority to place Fannie Mae and Freddie Mac into conservatorship at the height of the sub-prime mortgage crisis, an economic event that triggered the subsequent Great Recession. This move, originally intended as a temporary measure, established the two conservatorships in response to a deterioration in the nation’s housing market that damaged the financial condition of each, and left both of them unable to fulfill their missions without government intervention.
President Trump recently took to social media to make his intentions known that his administration was considering bringing Fannie Mae and Freddie Mac public, stating: “Our great Mortgage Agencies, Fannie Mae and Freddie Mac, provide a vital service to our Nation by helping hardworking Americans reach the American Dream—Home Ownership. 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. These Agencies are now doing very well, and will help us to, MAKE AMERICA GREAT AGAIN!”
The letter continues with several concerns that the coalition has regarding the reprivatizing Fannie Mae and Freddie Mac, specifically that no framework or guide exists for the plan.
“We have serious concerns that you plan to make significant changes to the Enterprises in a way that would put investor profits over the homes of millions of Americans. Should President Trump make good on his plans; he may take us back to the status quo before the 2008 foreclosure crisis, when the Enterprises’ investors enjoyed the full profits that come with privatization while knowing taxpayers would be on the hook for any future failures. In fact, as Trump’s posts have fostered uncertainty for consumers, the Enterprises’ stock prices have seen significant gains.”
Barron’s reports that Fannie Mae and Freddie Mac stocks traded more than 30% higher following President Trump’s post on the GSEs’ going public.
“It has also been reported that the Administration may consider relisting the Enterprises on a stock exchange … However, the Administration has also not released any information indicating whether the Enterprises’ financial positions would make it feasible to take them public, including by relisting their common and preferred stock, or what taking them public would entail,” the lawmakers continued in the letter.
Pulte recently appeared on the Fox Business program, “The Claman Countdown,” discussing news of the privatization, and the ripple effect it may have on the financial markets. Much of the concern about taking Fannie and Freddie public involves what is known as an “implicit guarantee” that the two had on mortgage loans—the market’s assumption that if something went wrong, the government would intervene and bail them out.
“A lot of other presidents, as you know, haven’t really focused on these two entities,” added Pulte. “It’s kind of crazy, to be honest with you, but President Trump, he just kind of finds money wherever it is, and in this case, he found at Fannie Mae and Freddie Mac … we have $7.8 trillion in these companies. There’s no President other than President Donald J. Trump who understands more about mortgage rates, the housing market construction … Fannie Mae and Freddie Mac could be way stronger in his hands, frankly, than anybody else’s hands.”
Additional Democratic Senators who are part of the coalition include: Sens. Tina Smith, Raphael Warnock, Lisa Blunt-Rochester, Catherine Cortez Masto, Ruben Gallego, Andy Kim, Chris Van Hollen, Mark Warner, Bernie Sanders, Mazie Hirono, Gary Peters, and Ron Wyden.
The Senators requested answers from Pulte to eight questions posed within the letter by June 18, 2025, followed by a briefing to discuss the responses.
Click here to view the full letter from the coalition of senators to FHFA Director Pulte regarding the reprivatization of Fannie Mae and Freddie Mac.
