If Donald Trump wins the presidential election, Republicans hope he will fulfill a longstanding GOP goal of privatizing the mortgage giants Fannie Mae and Freddie Mac, which have been under government control since the Great Recession. The Federal Housing Finance Agency has been overseeing the two firms for an extended period, with Republicans arguing that this has stifled competition in the housing finance market and put taxpayers at risk of another bailout. President Donald Trump previously sought to free the companies from government control during his tenure, but this was prevented by Joe Biden's victory in 2020.
Democrats and some economists caution that privatizing Fannie Mae and Freddie Mac could lead to higher mortgage rates, making homeownership more expensive, especially in the current climate of elevated mortgage rates. Concerns have been raised that without government support, the two firms would need to raise fees to offset increased risks, potentially causing mortgage prices to surge. Fannie Mae and Freddie Mac play a crucial role in the U.S. economy, guaranteeing approximately half of the $12 trillion U.S. home loan market.
