President Donald Trump said Thursday that he is directing representatives at the government-sponsored enterprises (GSEs) to purchase $200 billion in mortgage-backed securities (MBS), a move he said is intended to bring mortgage rates down.
“Because I chose not to sell Fannie Mae and Freddie Mac in my First Term, a truly great decision, and against the advice of the ‘experts,’ it is now worth many times that amount — AN ABSOLUTE FORTUNE — and has $200 BILLION DOLLARS IN CASH,” Trump wrote in a social media post. “Because of this, I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS.”
Trump’s comments come as the GSEs are already expanding their MBS portfolios. Combined holdings at Fannie Mae and Freddie Mac grew at a 77% annualized pace over the six months ending in November 2025, rising by more than $68 billion to approximately $247 billion.
There remains room for further expansion. Under the Preferred Stock Purchase Agreement (PSPA), each GSE’s retained portfolio is capped at $250 billion, with an additional $225 billion limit imposed by the Federal Housing Finance Agency (FHFA) under a prior director.
Mortgage industry experts are divided on the proposal. Supporters argue that the GSEs could quickly add demand to the MBS market as the Federal Reserve continues to scale back its presence.
The Community Home Lenders of America (CHLA) has recently urged the U.S. Department of the Treasury and the FHFA to allow the GSEs to expand their retained portfolios when the spread between the 10-year Treasury yield and the 30-year mortgage rate exceeds 170 basis points, which would lower mortgage rates by roughly 30 bps.
That spread currently sits near 200 bps, above the historical norm of roughly 140 to 170 bps.
But critics caution that larger GSE portfolios could raise conflicts of interest and revive political concerns tied to the enterprises’ role in the 2008 financial crisis, when outsized retained portfolios contributed to their collapse. Loan underwriting standards have improved significantly since then.
Some industry participants favor alternative approaches to reduce rates, including changes to the loan-level price adjustments (LLPAs) considered recently by FHFA Director Bill Pulte.
Trump said the proposed MBS purchases would “drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”
According to HousingWire‘s Mortgage Rates Center, the average 30-year conforming loan rate was 6.33% on Thursday.
The comments follow another housing-related proposal floated by Trump this week — a move to ban large institutional investors from buying single-family homes. Analysts say the plan would face significant hurdles and likely has limited impact. Trump is expected to outline additional proposals during a speech at the World Economic Forum in Davos in two weeks.
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