If Fannie Mae and Freddie Mac Go Private, Buying a Home Could Get Pricier

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Privatizing the government-sponsored mortgage giants could be a windfall for investors and raise interest rates for home buyers.

William Pulte wears a blue suit with a striped tie.

March 26, 2025Updated 11:54 a.m. ET

Fannie Mae and Freddie Mac have long been a bedrock of the American home-buying industry, turning what could otherwise be a volatile market into one that is stable and predictable for the people buying homes and the investors who purchase home loans as mortgage-backed securities.

But last week, William Pulte, President Trump’s appointee to lead the Federal Housing Finance Agency, shook the foundations of the two mortgage firms when he ousted 14 of their 25 sitting board members and installed himself as chairman of both boards. Mr. Pulte also removed executives at both companies and at FHFA, which regulates Fannie Mae and Freddie Mac. On Tuesday, he signed an order to end Fannie and Freddie programs designed to provide assistance with down payments and closing costs for some first-time home buyers.

The changes come as Trump administration officials ramp up talks of privatizing the mortgage giants, which have been under federal conservatorship since the foreclosure crisis in 2008.

While home buyers do not interact directly with Fannie Mae or Freddie Mac, their mortgages are likely backed by one of them. Together, the companies, which back single-family home loans up to $806,500, support around 70 percent of the U.S. mortgage market. Privatizing them could be a windfall for investors, but would likely make buying a home more expensive in the midst of an affordability crisis.

“It would mean that mortgage rates would increase — definitely,” said Laurie Goodman, the founder of the Housing Finance Policy Center at the Urban Institute, a think tank in Washington, D.C.