P
resident Donald Trump has announced plans to take Fannie Mae and Freddie Mac "public," but the specifics of his plan remain unclear. The president acknowledged that the government would maintain its implicit guarantees to backstop the agencies, which could be crucial in stabilizing the mortgage market. This move is part of ongoing discussions about privatizing the companies, which have been on hold since Trump's first administration.

    The government's implicit guarantee means it would step in before Fannie or Freddie default, as seen during the Great Recession when they were placed under a government conservatorship with a $2.25 billion line of credit from the US Treasury. This is not the first time Trump has expressed interest in releasing Fannie and Freddie from government control; last week, he said he was giving "very serious consideration" to privatizing them.

    The Mortgage Bankers Association supports an explicit guarantee to protect taxpayers, consumers, and the housing finance system. One proposal suggests that the enterprises could raise $20-30 billion from investors, valuing them at over $330 billion combined, which would put the government's stake at over $250 billion. Privatization has been a topic of discussion since 2008 when Fannie and Freddie fell under government control.