President Donald Trump announced Wednesday he’s giving “very serious consideration” to privatizing mortgage giants Fannie Mae and Freddie Mac, stating they’re “doing very well, throwing off a lot of CASH.” The government-sponsored entities have been under federal conservatorship since the 2008 financial crisis.
Trump attempted similar privatization efforts during his first term but failed. Republicans have long advocated for ending government control of these entities, which buy mortgages from lenders and repackage them for investors, helping maintain affordable mortgage rates.
However, economists warn privatization could backfire during a time of already high mortgage rates and home prices. Mark Zandi of Moody’s Analytics estimates privatization could cost typical homebuyers $1,800-$2,800 annually in higher mortgage payments.
The entities currently support the popular 30-year fixed-rate mortgage by providing market stability. Experts fear privatization could spook investors, driving up borrowing costs when housing affordability is already strained. Analysts don’t expect action until late 2026 or early 2027.
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