President Trump’s recent mortgage rate plan focuses on leveraging the financial strength of Fannie Mae and Freddie Mac to make homeownership more affordable.
In a Truth Social post, Trump highlighted his decision during his first term not to sell these government-sponsored enterprises, describing it as a “truly great decision” made against the advice of experts. Because of this choice, he stated that Fannie Mae and Freddie Mac are now worth many times more—an “absolute fortune”—and hold “$200 BILLION DOLLARS IN CASH.”
Building on this, Trump announced he is instructing his representatives to buy $200 billion in mortgage bonds (mortgage-backed securities). He explained that this action will drive down mortgage rates, reduce monthly payments, and, overall, make the cost of owning a home more affordable for Americans. The purchases are to be executed by Fannie Mae and Freddie Mac, as confirmed by Federal Housing Finance Agency Director Bill Pulte, who responded positively to the directive.
This move echoes past Federal Reserve quantitative easing efforts, in which buying mortgage bonds increases demand and pushes yields (and thus rates) lower, though experts note the $200 billion scale may have a more modest impact than trillions in prior programs. Trump framed the plan amid criticism of the previous administration’s handling of housing, inflation, and the economy, positioning it as part of restoring the American Dream. While the initiative uses the GSEs’ existing liquidity rather than new taxpayer funds, some analysts have raised concerns about potential risks to their balance sheets if market conditions shift.
Overall, the plan represents a targeted intervention in the housing market to address affordability challenges through lower borrowing costs. The announcement comes alongside other housing-related steps, such as efforts to limit large institutional investors in single-family homes. This bold directive underscores Trump’s emphasis on immediate relief for homebuyers and the broader housing sector.
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