For the second straight day, President Donald Trump made a social media proclamation that has the potential to significantly impact mortgage markets.
“Because I chose not to sell Fannie Mae and Freddie Mac in my First Term, a truly great decision, and against the advice of the ‘experts,’ it is now worth many times that amount — AN ABSOLUTE FORTUNE — and has $200 BILLION DOLLARS IN CASH,” Trump wrote Thursday afternoon on Truth Social. “Because of this, I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS. This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”
It wasn’t immediately clear which individuals or government entities “representatives” was referring to. But Bill Pulte, director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac, later confirmed in an X post that “Fannie and Freddie are the entities that will do the purchases.”
In a separate social media post, Pulte wrote, “We are on it, Mr. President!”
According to Reuters, Pulte told the news outlet in a phone interview that he believes Fannie and Freddie have “ample liquidity” to execute the purchases.
Earlier in the day, during an appearance on CNBC, Pulte said Trump will likely decide whether to sell shares in Fannie and Freddie through an initial public offering “in the next month or two.”
On Wednesday, in another move aimed at improving housing affordability, Trump indicated on social media that he was “immediately taking steps to ban large institutional investors from buying more single-family homes.”
That announcement was met with cautious optimism by some in the mortgage and housing industries, though others cautioned it could destabilize the residential lending industry by triggering regional housing price shocks.
Having Fannie and Freddie purchase additional mortgage-backed securities (MBS) to drive down mortgage rates was a concept previously endorsed by the Community Home Lenders of America and the Independent Community Bankers of America.
In a letter sent to Pulte and Treasury Secretary Scott Bessent in October, the community lender groups proposed that Fannie and Fannie should each have the ability to purchase up to $300 billion in MBS when the spread between 30-year mortgage rates and 10-year Treasury yields exceeds 170 basis points.
The groups argued that such actions would “address the secular and structural decline in demand for mortgage-backed securities” and “could reduce mortgage rates by 30 basis points or more.”
Fannie and Freddie are currently limited to holding up to $225 billion apiece of MBS. But according to The Wall Street Journal, they held a combined $247 billion as of November, meaning Trump’s proposal would technically be feasible.
