Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) are government‑sponsored enterprises (GSEs). They don’t make most mortgages directly to borrowers. Instead, they buy mortgages from banks and other lenders, bundle those loans into mortgage‑backed securities (MBS), and guarantee investors will be paid on time. This “secondary market” role gives lenders fresh cash so they can keep making new home loans, helps standardize mortgage products (like the 30‑year fixed), and tends to lower borrowing costs for homebuyers by spreading risk and increasing the supply of mortgage credit.
Mortgage‑backed securities (MBS) are bonds created from pools of home loans. Lenders sell many individual mortgages to an entity like Fannie Mae or Freddie Mac, which bundles them and issues securities that pass homeowners’ principal and interest payments through to investors.
When a large buyer (such as the federal government or the GSEs under White House direction) commits to purchase a big volume of agency MBS—$200 billion in this case—it increases demand for those securities. Higher demand raises MBS prices and pushes their yields down. Because typical U.S. mortgage rates are closely tied to yields on agency MBS, lower MBS yields translate into lower mortgage rates for borrowers, all else equal.
Directives from the White House by themselves do not automatically change how Fannie Mae and Freddie Mac operate day‑to‑day. Since 2008, both have been in federal conservatorship, and the Federal Housing Finance Agency (FHFA) is their statutory regulator and conservator. In that role, FHFA—not the White House—has the legal authority to set their risk standards, capital rules, and investment activities, though it can be influenced by administration policy and legislation. Other federal actors also have roles: the U.S. Treasury holds senior preferred stock and funding agreements with Fannie and Freddie, and Congress can change their mandates by law. But FHFA is the primary agency that legally oversees and controls Fannie Mae and Freddie Mac.
• First American Real House Price Index (RHPI): This index tries to measure housing affordability after adjusting for both inflation and changing mortgage rates. It starts with nominal house prices, adjusts them for general consumer‑price inflation, and then further scales them by changes in household income and mortgage interest rates to show how much “real” buying power a typical household has. A lower RHPI reading means higher affordability. First American publishes a methodology statement explaining these steps.
• National Association of Realtors (NAR) Housing Affordability Index (HAI): This index measures whether a “typical” family earns enough income to qualify for a mortgage on a “typical” home. It is calculated by comparing: (1) median family income with (2) the income needed to afford the monthly principal‑and‑interest payment on a median‑priced home, assuming a 20% down payment and a standard 25% payment‑to‑income qualifying ratio. An index value of 100 means the typical family has exactly enough income to qualify; above 100 means they have more than enough (more affordable), below 100 less than enough (less affordable).
Large institutional investors (such as private‑equity firms, REITs or large companies owning hundreds or thousands of homes) can affect the single‑family market in several ways:
• Availability: In areas where they buy heavily—often starter‑home neighborhoods—they bid against individual buyers, which can reduce the number of homes available for owner‑occupants. This is most pronounced in certain Sun Belt metros where institutional investor market share is high.
• Prices and rents: Evidence is mixed nationally, but studies and government reviews find that in markets or neighborhoods where institutional investors hold a significant share of properties, their purchases can contribute to faster price appreciation and higher rents by adding demand and, in some cases, exercising market power.
• Homeownership and neighborhood dynamics: Research suggests institutional single‑family rental ownership can slightly depress homeownership rates and may change neighborhood stability (e.g., shorter tenures, corporate management practices) compared with predominantly owner‑occupied areas.
At the national level, institutional investors still own a small share (roughly 1% of all single‑family homes), so the aggregate effect on U.S. prices is limited. But impacts can be meaningful in specific regions or submarkets where their presence is concentrated.
Public reporting on the Trump administration’s housing plans describes broad goals—"cutting red tape," increasing supply, encouraging first‑time buyers, exploring 50‑year mortgages, and limiting institutional investor purchases—but as of mid‑January 2026, no detailed package of federal regulatory changes or binding timelines has been finalized and published.
Coverage of the forthcoming housing executive order indicates the White House is considering directing agencies such as HUD and FHFA to: streamline or speed up some federal approvals, adjust rules affecting Fannie Mae and Freddie Mac (for example, around mortgage terms or first‑time‑buyer products), and explore ways to encourage more homebuilding. However, specific rule changes, legal text, and concrete implementation deadlines have not yet been released, so the exact regulatory steps remain uncertain.