Trump's plan to end Fannie Mae and Freddie Mac's conservatorship may face new opposition from Democrats after they take control of Congress.
President Donald Trump has suggested that Fannie Mae and Freddie Mac's government conservatorship should end. But whether that will happen under his administration remains unclear after the midterms.
Since the federal bailout in 2008, Fannie and Freddie have remained under conservatorship for 18 years, with the terms subjecting them to strict oversight and regulation by the Federal Housing Finance Agency.
For years, the U.S. Treasury has collected nearly all profits from the two entities, an amount surpassing $300 billion and exceeding the government's outlay in the bailout. Trump has floated the idea of ending the conservatorship since his first term in office, an idea that regained attention when he returned to the White House in 2025.
Trump suggested this could mean an initial public offering of the two mortgage giants, with both companies valued at up to $1 trillion combined and selling between 5% and 15% of their stock.
Key Democrats have expressed reservations about privatizing Fannie and Freddie or otherwise ending the conservatorship, raising questions about whether the Trump administration will pursue the matter with Democrats in control of Congress.
Trump has said little about the matter in recent months. Billionaire investor Bill Ackman, who has long pushed for an end to conservatorship, believes that the Trump administration wanted to wait until after the midterms to take action.
“The reason why it’s not being touched right now is, you know, midterms,” he told CNBC on Election Day.
Before the election, a senior Trump administration official said the end of conservatorship for Fannie and Freddie could still be on. Treasury Secretary Scott Bessent suggested the government could take up the matter again in 2027 or 2028.
U.S. Federal Housing Finance Agency Director William Pulte supported the idea this spring. He said that changes to their credit scoring requirements introduced this year could increase the chances of success. But only Trump knew the timing, he said.
“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.
But starting in January, the Trump administration may face stiff opposition in Congress to privatizing Fannie and Freddie, a move that many economists have warned could put upward pressure on mortgage rates.
Rep. Maxine Waters (D-CA), who's running to chair the House Financial Services Committee, has consistently opposed administrative efforts by regulators to rapidly release Fannie and Freddie from conservatorship without comprehensive congressional oversight, public transparency, 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 said at a hearing in April.
Chairman French Hill (R-AR) speaks with ranking member Maxine Waters (D-CA) before the start of a House Financial Services Committee hearing. (Bill Clark/CQ-Roll Call, Inc via Getty Images) Legal and political analysts are divided on whether the executive branch could end the conservatorship by fiat, but such a push would almost certainly face stiff opposition from Democrats in Congress.
The White House didn't respond to a Realtor.com® request for comment about the future of the conservatorship. Waters also didn't respond.
Even as he discussed the end of conservatorship, Trump used Fannie and Freddie as tools to try to help improve affordability in the market. That meant directing them to purchase $200 billion in mortgage-backed securities in an effort to improve the housing market.
Trump's former Federal Housing Commissioner Frank Cassidy told Realtor.com that privatization is a lever Trump could pull without his party controlling Congress. But it needs to be structured in a way that benefits the market. One worry is that the lack of government backing would drive up 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 said. "How do you structure it in a way that makes it more favorable? The idea under conservatorship is implicitly a government guarantee."
In the meantime, the Mortgage Brokers of America reiterated that a positive outcome is still possible.
"MBA continues to believe that GSE release must preserve what works to ensure that it continues to deliver what consumers need and investors expect," it said. "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."