The following content is sponsored by Housing for Us.
Sixteen years. That’s how long Fannie Mae and Freddie Mac have been stuck in federal conservatorship — a temporary fix that’s become permanent government control. It’s time to end it.
The Trump administration has the chance to finally close the book on the last big unfinished business from the financial crisis. By releasing Fannie and Freddie back to private markets, the government could lock in over $250 billion in profit for taxpayers — the biggest investment return since the Louisiana Purchase — and provide the resources needed to solve the housing crisis plaguing red and blue states alike.
Back in 2008, emergency measures were justified. But President Obama and President Biden turned the conservatorships into political piggy banks — using them to fund pet projects and delay real reform. That’s not what the law intended. And it’s not what the housing market needs.
Fannie and Freddie now hold more than $160 billion in capital — triple what they had before the crash. Their finances are strong. Their leadership is professional. They’re ready to stand on their own.
Taxpayers would win big. Restructuring Treasury’s stake would return billions to the public purse — money that should be used to create a loan program to support building more than 2.1 million homes for the forgotten middle class. And because it’s a loan program, the money could still be used to cut the deficit – a two-fer for President Trump.
Meanwhile, the government’s explicit backstop would remain in place to protect the mortgage market – though the entities could pay for that privilege. In addition, they can be released with a public utility-like structure that ensures they can deliver a healthy return for investors – say 8 to 12 percent – but have guardrails to prevent them from chasing higher returns and triggering another collapse.
Keeping these companies in limbo costs real money. Uncertainty raises mortgage rates, drives away talent, and weakens business relationships. It’s a hidden tax on every American homebuyer — and it’s completely avoidable.
If these were private companies in bankruptcy, they’d have exited long ago. But in Washington-run conservatorship, there’s no urgency, no clear accountability, and no incentive to finish the job. The result? A 16-year political tug-of-war that’s only helped insiders and special interests.
The Federal Housing Finance Agency and Treasury already have the legal tools to act. No new laws. No congressional gridlock. Just leadership.
President Trump has always championed common-sense reform. Ending the Fannie and Freddie conservatorships is exactly that — and it’s long overdue.
While ending the conservatorships would trigger the largest IPO in American history, President Trump shouldn’t stop there. By creating a low-cost loan program, he can trigger the largest middle class building boom since the post WW II era. In the last decade, the vast majority of housing built with government support has targeted the uber rich in the top 10 percent of earners and the bottom 25 percent of workers by income.
The middle 65 percent of American workers have been left out, forgotten by government leaders who pay lip service to the American dream and helping the middle class but doing very little. President Trump is a builder. He knows what it takes to build for the middle class, like his father did during his successful career.
Firefighters, cops, carpenters, Teamsters – all kinds of working people who make this country go are getting pushed further and further away from their jobs because housing prices – whether rents or cost of ownership – are just too high. Or they are living with their parents into their 30s just to avoid commutes that can mean three-hour roundtrips or more. That’s not good for young parents who want to coach their kids’ sports teams or just get home to help with homework.
The solution is more supply. Plain and simple. We need more of every kind of home – rentals, ownership, single-family, townhouses, condos, apartments. Whatever makes sense for a given community.
This housing boom would create countless jobs as well. Done right, we can make sure that the developers who get loans to build these homes are required to use workers who are American citizens or have legal status. In other words, homes for American workers built by American workers.
President Trump has the power to make all of this happen. He just needs to tell the Treasury Department and the Federal Housing Finance Agency (FHFA) to get to work.
Let’s finish what the crisis started. It’s time to free Fannie and Freddie from the government-controlled conservatorships. It’s time to address the housing crisis once and for all by putting the interests of the working middle class at the heart of this effort. It’s time for President Trump to seize this once-in-a-generation opportunity and cement his legacy as a true champion of the middle class.
