🏛 Should Uncle Sam Finally Set Fannie & Freddie Free?

Hello everyone! We’re diving into some major housing topics this week—from big changes potentially coming to Fannie & Freddie, to a new bill designed to give first responders and educators an incredible homebuying boost. Let’s get right into it!

Read time: ~3 minutes

Rates ended DOWN compared to last week, and volatility was HIGH. Rates are in the low 6’s for most loan types without paying discount points. Paying discount points can get you in the mid 6’s.

Why Have Fannie & Freddie Been Stuck Under Uncle Sam's Watch Since 2008?

Fannie Mae and Freddie Mac are the heartbeat of America’s mortgage market. They don’t directly lend money; instead, they buy mortgages from lenders, package them into securities, and sell them off to investors. This process keeps cash flowing and rates manageable.

But back in 2008, things turned ugly fast. Loaded with toxic loans and massive losses, Fannie and Freddie nearly collapsed, threatening to drag the whole mortgage system down with them. To avoid disaster, the government quickly stepped in, injecting billions of dollars and placing both under the Federal Housing Finance Agency (FHFA) via a conservatorship—a fancy term meaning Uncle Sam has ultimate control.

Ironically, even though their debts aren’t officially guaranteed by the government, the market behaves as if they are because the Treasury promised hundreds of billions in support.

Fast forward to today: over 15 years later, both companies remain under government control. Despite repaying their bailout (plus interest), they're still on Uncle Sam's leash—with no clear exit plan…until now.

🏛 Should Uncle Sam Finally Set Fannie & Freddie Free?

President Trump and FHFA Director Bill Pulte are seriously considering ending the conservatorship. Let’s weigh the pros and cons:

✅ Possible Benefits:

• More Innovation: Private companies adapt faster. Expect better technology, streamlined lending, and potentially a smoother experience for borrowers.

• Reduced Taxpayer Risk: Privatization could lessen taxpayer exposure if another crisis hits.

• Market Stability: Removing uncertainty around government control could offer long-term clarity to investors, lenders, and real estate professionals.

• Increased Capital: As independent entities, Fannie and Freddie could raise private funds, possibly strengthening the mortgage market. Plus, the government could cash out shares via IPO for a sizable payday.

⚠️ Possible Risks:

• Higher Mortgage Rates: Without a government guarantee, investors will perceive more risk, demanding higher returns—which means increased rates for buyers.

• Stricter Guidelines: Answering to shareholders rather than taxpayers could tighten lending standards significantly.

• Reduced Affordable Housing Initiatives: Mandates supporting first-time buyers and underserved communities might diminish under a purely profit-driven model.

• Transition Chaos: Shifting from government control to private management could cause short-term disruptions in rates, policies, and market confidence.

Bill Pulte notes this isn’t his top priority, but momentum for ending conservatorship is growing.

The HELPER Act: Giving Heroes the Housing Break They Deserve!

There’s a powerful new bill gaining momentum that could dramatically improve homebuying power for some of our community’s most essential members—teachers, police officers, firefighters, and EMTs. Imagine something similar to the VA loan program, but specifically tailored for these everyday heroes who keep our neighborhoods safe and our kids educated.

The HELPER Act (Homes for Every Local Protector, Educator, and Responder) would offer eligible first-time buyers in these professions some serious benefits:

• Zero Down Payment: No upfront cash needed at closing.

• No Monthly Mortgage Insurance: Completely eliminating the pesky monthly MIP payments.

• One-Time Upfront MIP: A single upfront premium of 3.6% (similar to VA and FHA loans) to keep the program sustainable.

This isn’t just great news for first responders and educators—it’s also a huge opportunity for us real estate professionals. Lower barriers mean more qualified buyers, more closings, and stronger communities.

I don’t know about you, but my team and I are ready to back this act 100%! 💪 Let’s get this thing passed!

Two Ways My Team & I Can Help

1. Lets collaborate- Schedule a zoom meeting

2. Tough Deal? Let us know if we can help