In a major move to address the U.S. housing affordability crisis, President Donald Trump has directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS). This intervention is specifically designed to drive down interest rates for American homebuyers by increasing the demand for mortgage bonds.

The Mechanics of the Plan

The directive taps into the substantial cash reserves currently held by Fannie Mae and Freddie Mac. By deploying this capital into the bond market, the administration expects to see a direct reduction in the yields that dictate consumer mortgage rates.

• The Funding: The administration is utilizing an estimated $200 billion in cash reserves amassed by the government-sponsored enterprises.
• The Target: Officials are aiming to bring average mortgage rates down from their current levels to well below 6%.
• The Execution: The Federal Housing Finance Agency (FHFA) will oversee the phased purchase of these securities to ensure market stability while maximizing the downward pressure on rates.

Market Impact and Outlook

Economists suggest that this influx of capital could lower mortgage rates by 10 to 50 basis points in the short term. However, the long-term impact on home prices remains a subject of debate, as lower rates typically increase buyer demand, which can lead to higher property values if supply remains low.

Broader Housing Initiatives

This bond-buying program is part of a larger multi-pronged housing strategy for 2026, which also includes:

• Restrictions on Institutional Buyers: Policies aimed at preventing large Wall Street firms from buying up single-family homes.
• 50-Year Mortgage Options: New loan products designed to lower monthly payments for first-time buyers.
• Supply Expansion: The planned release of federal lands for residential construction to increase the number of homes on the market.

In a significant intervention into the U.S. housing market, President Donald Trump announced on January 8, 2026, that he is directing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS).¹

This move is designed to artificially lower mortgage rates and ease the affordability crisis currently squeezing American homebuyers.²

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Trump’s $200B Housing Stimulus: A Direct Move to Slash Mortgage Rates

Coming off the back of a series of aggressive housing reform promises, President Trump took to Truth Social to announce a direct directive to the government-sponsored enterprises (GSEs).⁴ By purchasing $200 billion in mortgage bonds, the administration aims to increase demand for these securities, which typically forces yields—and by extension, consumer mortgage rates—downward.⁵

The Mechanics of the Plan

The directive utilizes the massive cash reserves held by Fannie Mae and Freddie Mac, which have remained under government conservatorship since the 2008 financial crisis.⁶

• The Funding: Trump claimed the two giants have amassed an “absolute fortune” of $200 billion in cash, which he is now tapping for this initiative.⁷
• The Goal: To drive mortgage rates down from their current 6.2% average toward a target below 6%, potentially saving homeowners hundreds of dollars in monthly payments.⁸
• Execution: Federal Housing Finance Agency (FHFA) Director Bill Pulte confirmed the move, stating that the agencies have “ample liquidity” and will execute the purchases “smartly and in a very big way.”⁹

Market Impact and Expert Analysis

While mortgage-linked stocks like Rocket Companies and LoanDepot rallied on the news, economists are divided on whether this “band-aid” will solve the structural issues in the housing market.¹⁰