Trump directs Fannie and Freddie to buy up to $200 billion in mortgage bonds

President Trump said on social media on Thursday that he is directing Fannie Mae and Freddie Mac to buy up to $200 billion in mortgage‑backed bonds as part of an effort to make homes more affordable. The announcement was short on details but prompted an immediate market reaction: the spread between mortgage bond yields and Treasuries narrowed by 0.1 percentage points.

Analysts noted that consumer mortgage rates are shaped by many factors, including Federal Reserve policy, and questioned how large a long‑term effect the purchases would have. The move is one of several housing proposals from the White House, which has also urged Congress to bar big Wall Street firms from buying single‑family homes to operate as rentals and is said to be considering letting buyers use retirement savings for down payments.

Fannie and Freddie normally buy mortgages from lenders and package them into securities sold to investors; buying mortgage bonds for their portfolios would mark a return to a strategy that helped push the firms toward bankruptcy before 2008, when the government took them over. “There is no question if Fannie and Freddie get back into buying mortgage bonds for their portfolios, mortgage rates will undoubtedly fall,” said David Dworkin of the National Housing Conference.

Key Topics

Business, Fannie Mae, Freddie Mac, Mortgage Bonds, Donald Trump, Fhfa