Trump Calls on Fannie and Freddie to Buy $200 Billion in Mortgage Bonds

Trump is pushing a plan for Fannie Mae and Freddie Mac to buy up to 200 billion dollars in mortgage-backed bonds, aiming to push mortgage rates and monthly payments lower and ease housing costs ahead of the 2026 midterms. The move is large enough to matter for markets, but many analysts say it helps rates more than it fixes the underlying shortage of homes for sale.​

What Trump announced

• Trump said on Truth Social that he is “instructing my Representatives to BUY 200 BILLION DOLLARS IN MORTGAGE BONDS” to tackle the national housing affordability crisis he blames on the Biden administration.​

• He has specifically framed the action around Fannie Mae and Freddie Mac, claiming they have about 200 billion dollars in cash and can use it to buy mortgage-backed securities (MBS).​

• The White House is casting this as part of a broader push on the cost of living and housing before the November midterm elections.​

Role of Fannie Mae and Freddie Mac

• Fannie and Freddie are government-backed mortgage finance companies that buy home loans from lenders, package them into MBS, and guarantee them, supporting trillions of dollars in U.S. mortgages.​

• They remain in federal conservatorship, but under the current plan their regulator, the Federal Housing Finance Agency (FHFA) and its director Bill Pulte say they will execute Trump’s directive by buying 200 billion dollars in mortgage bonds from the public market.​

• Their MBS portfolios have already been growing and are approaching regulatory caps, so a purchase of this size is a major expansion of that activity.​

Intended impact on mortgage rates

• Trump and his team argue the large-scale buying will raise demand for mortgage bonds, push up their prices, and thereby lower yields and mortgage rates, similar in spirit to quantitative easing.​

• Trump has promised this will “drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”​

• Housing economists estimate such a program might trim something like 0.25 to 0.5 percentage points off the average 30‑year fixed mortgage rate, though exact effects depend on execution and market conditions.​

Risks and criticisms

• Critics note that Fannie and Freddie’s portfolio buildup in mortgage bonds was a key vulnerability in the 2008–09 financial crisis, raising concern about concentrating risk again inside government-backed entities.​

• Analysts warn that lowering rates without increasing housing supply could reignite home-price inflation, because cheaper financing lets buyers bid more for a limited number of homes.​

• Some market observers also point out that it’s unusual for the executive branch, rather than the Federal Reserve, to be the driving force behind a quasi–quantitative-easing program in mortgage bonds, raising questions about precedent and political use of housing finance tools.​

How this fits broader housing moves

• Trump has paired the bond plan with a push to restrict large institutional investors from buying additional single‑family homes, arguing they have helped drive up prices and rents in some areas.​

• The administration presents the MBS purchase as one leg of a wider housing reform agenda, but many experts stress that the core problem is a several‑million‑home supply shortfall in the U.S., which this financial move alone cannot solve.​