Trump: I’m taking Fannie and Freddie ‘public’ with implicit guarantee

President Trump last week promised a quick answer on whether to remove Fannie Mae and Freddie Mac from government conservatorship. And it appears he’s already reached a decision: it’s time to take them ‘public.’

In a post published on Truth Social Tuesday night, Trump wrote:

Our great Mortgage Agencies, Fannie Mae and Freddie Mac, provide a vital service to our Nation by helping hardworking Americans reach the American Dream – Home Ownership. I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President. These Agencies are now doing very well, and will help us to, MAKE AMERICA GREAT AGAIN!

Trump didn’t offer specific detail on a timeline or what an exit from conservatorship would look like.

The implicit guarantee is among the more complicated issues to be resolved for Fannie Mae and Freddie Mac to be removed from the government conservatorship it entered into 16 years ago.

After Trump’s announcement last week, analysts from Keefe, Bruyette & Woods (KBW) pointed out that the agency mortgage-backed securities (MBS) market continues to rely on the perceived government backstop for the GSEs. A return to a pre-Great Financial Crisis (GFC) implicit guarantee is possible — but only if the Treasury clearly communicates it, they said. 

”Post-GFC, the nature of the relationship changed after the credit line [of $2.25 billion available] increased sharply, the Treasury invested capital into the companies and the backing by Treasury arguably became more explicit given the conservatorship status of the GSEs. We think a return to the pre-GFC implicit guarantee is possible, but only if Treasury messages this effectively,” KBW analysts said. 

The Mortgage Bankers Association (MBA) has strongly advocated for a formal guarantee from the government. In a statement to HousingWire last week, MBA president and CEO Bob Broeksmit said: “MBA stands ready to work with the Trump administration on a thoughtful plan to end the conservatorships of Fannie Mae and Freddie Mac in a way that avoids any market disruption or increased costs for borrowers.

“We also believe strongly that any release must include an explicit federal backstop — paid for by the GSEs — of their mortgage-backed securities to protect taxpayers, consumers, and our housing finance system.”

Treasury Secretary Scott Bessent previously said a Fannie and Freddie exit would depend on the implications for mortgage rates.