After more than 16 years under federal conservatorship, Fannie Mae and Freddie Mac—two government-sponsored enterprises (GSEs) critical to the U.S. housing finance system—may finally be released under a renewed push by the Trump administration. While this move has long been discussed in policy circles, its implications for the multifamily housing industry are especially significant now that the administration appears serious about executing what was always intended: transitioning the GSEs out of government control.
Why Now?
Fannie and Freddie were placed in conservatorship in 2008 amid the global financial crisis. Though the move was initially intended as a temporary stabilization effort, the GSEs have remained under government control for over a decade, generating billions in profits for the Treasury. Trump’s return to the White House has reignited efforts to reform the GSEs, driven by a belief that their long-term presence in conservatorship distorts markets and encourages moral hazard.
In May 2025, Trump posted on Truth Social that he’s exploring a public offering of the GSEs—a message that immediately sent stock prices of Fannie Mae and Freddie Mac soaring, with gains of 50 percent and 42 percent, respectively. He clarified that if these companies were taken public, the U.S. government would retain its implicit guarantees and he would maintain his oversight role as President. The announcement reignited speculation about privatization and offered a windfall for long-time investors who have held shares since the companies were placed in conservatorship.
Who’s Leading the Charge?
President Trump’s recent nomination of Bill Pulte as Director of the Federal Housing Finance Agency (FHFA) and Scott Bessent as Treasury Secretary marks a decisive shift from the previous administration’s approach. At the MBA Secondary Mortgage and Capital Markets conference in New York, Pulte made clear that the decision to end conservatorship is “entirely up to President Trump.” Still, Pulte emphasized his desire to put the GSEs “on a treadmill,” trimming what he described as needless layers of bureaucracy and paperwork that have accumulated under government oversight.
Who Benefits?
Releasing Fannie and Freddie could benefit a range of financial actors beyond hedge funds and private equity firms. Investment banks and underwriters could earn substantial fees from a public offering or restructuring process. Legal and consulting firms may also benefit from advising on capital structuring and regulatory compliance. And, large multifamily lenders and servicers might gain more flexibility or expanded roles in a post-conservatorship landscape.
Impact on Borrowers
But experts warn that without careful implementation, privatization could increase mortgage rates. A 2020 Congressional Budget Office estimate suggested that shifting more risk to the private sector could raise mortgage rates by 10 to 30 basis points, or roughly $1,800 to $2,800 over the life of an average loan. While those costs may appear modest on a monthly basis, they could significantly impact affordability, especially for first-time homebuyers. Both Bessent and Pulte have said they will not support a GSE release that results in higher costs for borrowers.
The Multifamily Housing Stake
For the multifamily sector, the stakes are even higher. Fannie Mae and Freddie Mac currently provide roughly 40 percent of all multifamily financing, making them indispensable to apartment developers and owners—especially those operating in affordable housing and workforce housing segments. These loans are often underwritten with unique terms, including interest-only periods, longer amortization schedules, and fixed rates that aren’t readily available in private markets.
The National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) have long advocated for preserving the GSEs’ role in multifamily finance. In a joint statement to Congress in January 2025, they emphasized that GSE-backed financing provides essential liquidity, especially during market downturns, and that multifamily lending should not be conflated with single-family reform. The multifamily operations of the GSEs have remained financially sound, even during crises. The limited government guarantee is critical to attract private capital without spiking borrowing costs, and support for affordable and underserved housing must remain a priority, regardless of ownership structure, said the two lobbying groups.
What Happens Next?
Trump’s Treasury Department is expected to release a formal plan later this year. Some options under discussion include:
• Requiring the GSEs to raise significant private capital buffers before release.
• Creating utility-style charters to maintain mission obligations while operating as private firms.
• Encouraging new entrants to reduce reliance on Fannie and Freddie.
However, each of these steps comes with trade-offs.
Overcapitalizing the GSEs could limit their ability to lend, while bringing in private competitors might create fragmentation or reduce lending to low-income markets. Releasing the GSEs without adequate guardrails could spook investors or raise systemic risks.
Conclusion
For multifamily developers, owners and investors, the upcoming changes to Fannie and Freddie are more than abstract policy tweaks—they represent a potential overhaul of how apartments are financed in the United States. There is a sense of optimism among stakeholders that the Trump administration’s focus on privatization and market discipline could bring much needed reforms and efficiency to Fannie Mae and Freddie Mac.
As the NMHC and the NAA emphasize, any path forward must be carefully designed to preserve and strengthen the housing infrastructure that millions of Americans depend on—not just for homeownership, but for rental housing as well.
