President Donald Trump said Thursday he had ordered “my representatives” to buy $200 billion in mortgage bonds in an attempt to drive down interest rates and monthly payments, writing in a Truth Social post.
Fannie Mae and Freddie Mac, two government-owned mortgage giants, are now worth “an absolute fortune” and have enough cash to fund the directive, he wrote in the post.
“Because I chose not to sell Fannie Mae and Freddie Mac in my First Term… it is now worth many times that amount — AN ABSOLUTE FORTUNE — and has $200 BILLION DOLLARS IN CASH. Because of this, I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS,” he wrote.
“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”
Traditionally, the Federal Reserve has been the largest buyer of mortgage-backed securities. During the pandemic, the central bank bought hundreds billion of dollars worth of the securities, which helped contribute to the ultra-low mortgage rates many Americans were able to lock in during those years.
Generally, when the Fed or another entity purchases more mortgage-backed securities, namely mortgage bonds, it lowers the interest rates charged on mortgages. But that’s not always the case, as the Fed does not directly control the rates on those loans.
For instance, the Fed lowered its benchmark interest rate multiple times last year and in 2024, which traditionally would also help lower mortgage rates. However, mortgage rates have remained elevated in part because Americans who got low mortgage rates during the pandemic haven’t been moving.
Trump has been weighing an IPO of Fannie and Freddie for years, including in his first term. CNN reported in August that Trump and his economic advisors are planning a sale of stock of the two entities.
Trump did not specify who the representatives are, or when or how the purchases would happen.
This is a developing story and will be updated.