President Donald Trump said Tuesday that the government would maintain implicit guarantees for Fannie May and Freddie Mac, even if it was moving forward with plans to bring the mortgage giant to the public.
Fannie May and Freddie Mac are government-sponsored entities that provide liquidity, stability and affordability to the U.S. home mortgage market, according to the Federal Housing Financial Institution (FHFA), which regulates entities. Businesses have been under government sanctuaries since the 2008 financial crisis.
Trump said the two mortgage giants have provided “critical services” to the country and the government is keeping their oversight.
“I’m working to make these amazing companies public, but I want to be clear. The US government will continue to be strong in my position to maintain tacit guarantees and oversee them as president,” he said in the Truth Social Post. “These agents are doing very well now and are helping us. They will make America great again!”
Last week, Trump said he would make a final decision on privatizing the company before consulting with Treasury Secretary Scott Bescent, Commerce Secretary Howard Luttonick and FHFA Director Treasury Secretary William Prute.
“I’m very serious about revealing Fannie May and Freddie Mac,” he said. “Fannie Mae and Freddie Mac are doing very well, throwing a lot of cash at them. Time seems right.”
Taking businesses to the public will likely involve termination of government parents. According to a 2021 statement, the Treasury holds preferred stock in the company and guarantees that it will purchase approximately 80% of its common stock.
Bescent told Bloomberg in February that the releases of Fannie Mae and Freddie Mac from government parents will depend on the meaning of mortgage rate trends.
“The most important indicator I’m looking at, the priorities for Fanny and Freddie releases, are research or hints that mortgage rates will increase,” Bescent said. “So, focusing on safe and healthy releases depends on the effectiveness of long-term mortgage rates.”
Trump tried to end the mortgage giant’s government control during his first term, but his efforts failed.
Jacob Berg contributed to this report.
