Mortgages Under Trump: What Happens if He Privatizes Fannie Mae and Freddie Mac?
Lenders, consumers and industry observers have speculated for some time about the possible privatization of Fannie Mae and Freddie Mac and how it would impact consumers. However, privatization was not seen as a certainty – attempts during the previous Trump administration to release the organizations from government control were unsuccessful.
But a May 21 post by the president on his Truth Social network indicates that he is giving "very serious consideration" to taking the firms public, considering that they "are doing very well, throwing off a lot of CASH." The president indicated that he will discuss the possibility with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Federal Housing Finance Agency Director William Pulte and make a decision very soon.
Here's what consumers need to know about the possible impact on mortgage financing in the near future.
The Lead Up to Privatization
In March 2025, a surprising shake-up occurred at Fannie Mae and Freddie Mac. Pulte appointed himself chairman of both government-sponsored enterprises, or GSEs, and pushed out 14 board members. These moves, disclosed in regulatory filings without explanation, have led to speculation that Pulte may be prepping to merge the two mortgage giants, which employ about 15,000 people.
His swift reorganization aligns with wider federal efforts to streamline operations, and although Pulte had previously indicated that privatization isn't his biggest priority, it may still be on the horizon.
Fannie Mae and Freddie Mac support the mortgage market by buying loans from mortgage lenders, bundling them into mortgage-backed securities and selling them to investors. This increases the availability and affordability of mortgages and standardizes industry guidelines. But the Trump administration wants to privatize Fannie Mae and Freddie Mac, which could radically change the mortgage experience for consumers.
Mortgages Under Trump: What's Happening to Fannie Mae and Freddie Mac?
If you have a home loan or are pursuing one, chances are that Fannie Mae and Freddie Mac were or will be involved with that loan.
Understanding Fannie Mae and Freddie Mac
Fannie Mae, the Federal National Mortgage Association, and Freddie Mac, the Federal Home Loan Mortgage Corp., play a crucial role in making homeownership more accessible. They help ensure stability and liquidity in the housing market by purchasing mortgages from lenders, pooling them into mortgage-backed securities, selling those securities to investors and guaranteeing payment to those investors. In fact, they are the largest purchasers of home loans in the U.S. mortgage market.
"When banks lend you money to buy a house, they don't have unlimited cash. They need to free up money to lend to more people, which is where Fannie and Freddie step in," says Steven Glick, mortgage sales director for HomeAbroad, a fintech platform that provides mortgage solutions for foreign real estate buyers. "This process keeps the housing market stable by making sure there's always money available for people looking to purchase a home. Without them, getting a mortgage would be harder and way more expensive."
Fannie and Freddie establish guidelines that loans must meet, or conform to, in order to be sold through the GSEs. That's why Fannie Mae and Freddie Mac mortgages are called conforming loans.
"The key differences between the two are subtle. Fannie Mae typically focuses on working with larger commercial banks, while Freddie Mac traditionally partners more with smaller banks and credit unions," says Reed Letson, branch manager and owner of Elevation Mortgage. "Both follow similar guidelines for loan approval, including credit score requirements, debt-to-income ratios and maximum loan limits."
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