Trump Orders Fannie and Freddie to Buy $200 Billion in Mortgage Bonds
President Trump announced on January 8, 2026, that he is directing Fannie Mae and Freddie Mac to purchase up to $200 billion in mortgage-backed securities to lower mortgage rates and improve housing affordability. This move leverages the entities’ substantial cash reserves, which Trump credits to his decision not to sell them during his first term.
The directive came via a social media post on Thursday, where Trump stated it would drive down mortgage rates, monthly payments, and homeownership costs ahead of midterm elections. FHFA Director Bill Pulte confirmed Fannie and Freddie would execute the purchases from the public market, citing their ample liquidity.
Fannie Mae and Freddie Mac buy mortgages from lenders, bundling them into securities sold to investors, which frees up bank capital for more loans. This action echoes pre-2008 practices that contributed to their crisis-era troubles but aims to fill a gap left by the Federal Reserve’s reduced role in the market.
Higher demand for mortgage bonds could raise their prices and lower yields, potentially reducing rates for homebuyers. Critics, including a recent Urban Institute report, warn of risks similar to those before the financial crisis when excessive purchases led to heavy losses. Trump frames it as restoring the “American Dream” disrupted by prior policies.
