President Donald Trump said on Thursday that he is instructing his “Representatives” to buy $200 billion worth of mortgage-backed securities, commonly known as mortgage bonds. He said the purpose of this move is to lower mortgage rates, reduce monthly home payments, and make housing more affordable for Americans.
Trump made the announcement in a post on Truth Social, where he said the action is possible because Fannie Mae and Freddie Mac, the two government-sponsored mortgage companies, have large amounts of cash available. Housing affordability has become a major political issue, as many families struggle with high home prices and borrowing costs.
What Trump Announced and the Reason Behind It
In his post, Trump said he chose not to sell Fannie Mae and Freddie Mac during his first term as president. He said that decision allowed the companies to grow in value and build strong financial reserves. Trump claimed that these entities now hold around $200 billion in cash, which he described as “an absolute fortune.”
Trump said he is directing this money to be used to buy mortgage bonds. According to him, increasing demand for these bonds would push mortgage rates down. Lower mortgage rates can reduce monthly payments for homeowners and buyers, making it easier for people to afford homes.
Mortgage-backed securities are investments tied to home loans. When large institutions buy these securities, it can influence the cost of borrowing. Trump said the bond purchases would directly help the housing market by easing financial pressure on families.
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Trump also criticized the administration of former President Joe Biden, saying the housing market was ignored during Biden’s term. He claimed that many parts of the economy were broken and that his administration is now giving special attention to housing and affordability.
Trump said affordability has become a central issue for voters and emphasized that his administration is focused on lowering costs for Americans.
Who Would Carry Out the Bond Purchases
A major question raised by the announcement is who would actually buy the $200 billion in mortgage bonds. Trump referred only to his “Representatives” and did not clearly name the agency or department responsible.
It was not immediately clear whether the purchases would be made by Fannie Mae and Freddie Mac, the U.S. Treasury Department, or another government-related entity. The White House and the Federal Housing Finance Agency (FHFA) did not immediately respond to requests for clarification.
Later on Thursday, Bill Pulte, the Director of the FHFA, posted on social media that Fannie Mae and Freddie Mac would be executing the bond purchases. His statement suggested that the two housing finance companies would be responsible for carrying out Trump’s directive.
Earlier the same day, Pulte said in a television interview that Trump is expected to make a decision within the next month or two on a possible public offering of Fannie Mae and Freddie Mac. These companies have been under federal control since the 2008 financial crisis.
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It is important to note that the Federal Reserve has bought mortgage bonds in the past as part of its monetary policy. However, the president cannot order the independent central bank to take such action.
The U.S. Treasury has also purchased mortgage bonds before, but mainly during periods of extreme financial stress, such as the housing crisis of 2008 and 2009.
Market Reaction and Unanswered Details
Financial markets reacted cautiously to Trump’s comments. After his post, the yield on the 10-year U.S. Treasury note moved slightly lower in after-hours trading. Mortgage rates often follow long-term Treasury yields, which is why the movement drew attention.
However, it remains unclear whether the bond purchases would significantly impact mortgage rates. In past cases, large bond-buying programs involved multiple types of securities and larger overall efforts.
Trump did not provide a timeline for when the $200 billion bond purchases would begin. He also did not explain how the purchases would be structured or whether congressional approval would be needed.
As of now, no detailed plan has been released by government agencies. The announcement highlights a strong focus on housing affordability, but many practical details about how the directive would be carried out remain unanswered.