Federal Housing Finance Agency (FHFA) Director Bill Pulte accommodated President Trump’s announcement of a federal purchase of $200 billion in mortgage bonds by making a unilateral and unpublicized policy change that enabled Fannie Mae and Freddie Mac to raise the limit of mortgage bonds they could hold in their portfolios.
The Associated Press obtained an interagency email dated Jan. 12 where Pulte stated the government-sponsored enterprises (GSEs) could increase the amount of mortgage bonds in their respective to $225 billion each. This action, which Pulte said was “effective immediately,” erased the longstanding cap that limited the GSE’s holdings to $40 billion.
It is unclear whether Pulte had the approval of either the White House or Treasury Secretary Scott Bessent in making this policy change. Trump sought the $200 billion mortgage bond purchase as a strategy for lowering mortgage rates, which remains above 6% despite the president’s efforts.
Pulte got wind of the Associated Press story before it was published and used his personal X account to declare the story was “fake news” while insisting that “FHFA simply gave each entity legal flexibility to go beyond their previous caps.” He added the GSEs’ new bond purchasing authority would not “exceed $200 billion.”
Sen. Elizabeth Warren (D-MA), the ranking member of the Senate Banking Committee, criticized Pulte’s action.
“This is just a smoke screen for Trump and Bill Pulte to tweet about — it will do little, if anything, to lower mortgage interest rates over the long term and raises questions about increased risks to Fannie and Freddie,” said Warren.
