What's Next for Fannie Mae and Freddie Mac After the Midterm Elections

Following the recent midterm elections, the future of Fannie Mae and Freddie Mac remains uncertain, particularly in the context of President Donald Trump's suggestion to end their long-standing government conservatorship. These government-sponsored enterprises have been under conservatorship since the federal bailout in 2008, enduring nearly 18 years of strict oversight from the Federal Housing Finance Agency (FHFA).

During this period, the U.S. Treasury has received almost all profits generated by Fannie Mae and Freddie Mac, totaling over $300 billion—significantly surpassing the initial bailout costs. Trump has advocated for the termination of the conservatorship since his first term, a topic that regained prominence following his return to the White House in 2025. He has indicated that this could pave the way for an initial public offering (IPO) for the two entities, which could be valued at as much as $1 trillion collectively, with a potential stock sale of between 5% and 15%.

However, key Democratic figures have expressed skepticism regarding the privatization of Fannie and Freddie or the cessation of their conservatorship, raising concerns about whether the Trump administration can effectively pursue these changes with Democrats in Congress. Recently, Trump has been relatively quiet on this issue. Investor Bill Ackman, who has long advocated for the end of the conservatorship, suggested that the administration may have been waiting for the midterm results before taking any decisive action. “The reason why it’s not being touched right now is, you know, midterms,” he remarked on Election Day.

Prior to the elections, a senior official from the Trump administration stated that the possibility of ending the conservatorship for Fannie Mae and Freddie Mac remains on the table. Treasury Secretary Scott Bessent hinted that discussions could resume in 2027 or 2028. This spring, FHFA Director William Pulte expressed support for the idea, noting that new credit scoring requirements implemented this year could enhance the prospects for a successful transition. “We stand ready every day to execute the president’s vision, and if and when he decides he wants to do something, we are locked and loaded and ready to go,” Pulte said.

Starting in January, however, the Trump administration may confront significant resistance in Congress regarding the privatization of these enterprises, a move that many economists warn could lead to higher mortgage rates. Representative Maxine Waters (D-CA), who is vying to chair the House Financial Services Committee, has consistently opposed swift efforts to release Fannie and Freddie from conservatorship without comprehensive congressional oversight and safeguards for affordable housing and racial equity. “To address the affordable housing crisis, Congress must ensure that Fannie and Freddie meet their mission to provide liquidity, sustainability, and affordability to all housing markets in the U.S., and at all times,” Waters emphasized during an April hearing.

Opinions among legal and political analysts differ on whether the executive branch could unilaterally end the conservatorship, but any such attempt would likely face strong opposition from Democrats in Congress. The White House did not respond to inquiries from Realtor.com® regarding the future of the conservatorship, nor did Waters provide a comment.

Despite discussions about ending the conservatorship, Trump has also utilized Fannie Mae and Freddie Mac to address affordability issues in the housing market, instructing them to purchase $200 billion in mortgage-backed securities to bolster the market. Frank Cassidy, a former Federal Housing Commissioner, noted that privatization could be a strategy for Trump to pursue even without congressional support, though it must be carefully structured to benefit the market. One concern is that removing government backing could lead to increased mortgage rates. “It hasn't been a priority yet. It would need to be worked on very quickly because it will take some time,” Cassidy remarked. “How do you structure it in a way that makes it more favorable? The idea under conservatorship is implicitly a government guarantee.”

Meanwhile, the Mortgage Brokers of America expressed optimism about a potential positive outcome, advocating for a release that maintains effective mechanisms to meet consumer needs and investor expectations. “MBA continues to believe that GSE release must preserve what works to ensure that it continues to deliver what consumers need and investors expect,” the organization stated. “And importantly, any release must include an explicit federal backstop—passed by Congress and paid for by the GSEs—of their mortgage-backed securities to protect consumers, taxpayers, and our best-in-the-world housing finance system.”

Tristan Navera reports on housing policy and market trends from Washington, DC. He previously worked as a senior reporter at Bloomberg Law and covered real estate for the Washington Business Journal. With a decade of experience in business and real estate reporting in Dayton and Columbus, OH, Navera is a Cincinnati native and holds a journalism degree from Ohio University.