Desbloquear el potencial del mercado de capitales: El camino hacia delante para la reforma de Fannie Mae y Freddie Mac

The U.S. housing finance system stands at a crossroads. Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that guarantee $7.6 trillion in home mortgages-59% of total mortgage balances nationwide-remain central to maintaining liquidity, affordability, and economic stability according to the RER report. As the Trump administration advances reform proposals, including a potential initial public offering (IPO) by year-end 2025, the stakes for capital markets and economic growth have never been higher. This analysis explores how unlocking private capital participation while preserving systemic stability could redefine the GSEs' role in the 21st-century housing market.

The Reform Imperative: Privatization and Market Realignment

The GSEs' conservatorship since 2008 has created a paradox: their implicit government guarantees underpin investor confidence and low mortgage rates, yet they expose taxpayers to potential future risks according to research. Privatization, as proposed by the Trump administration, aims to transition the GSEs into private entities while retaining government backstops to avoid market disruption as the National Housing Center notes. This approach hinges on establishing a market valuation of the Treasury's $340 billion stake through convertible bonds or public offerings as the National Housing Center notes. However, such steps face hurdles, including the GSEs' $181 billion capital shortfall relative to regulatory requirements and the political complexity of forgiving the Treasury's liquidation preference as Harvard's JCHS blog reports.

The Federal Housing Finance Agency (FHFA) has emphasized strategic goals focused on responsible oversight and systemic stability according to Stanford's SIEPR policy brief. These include recalibrating guarantee fees (g-fees) to reflect market risks and ensuring the GSEs' ability to support affordable housing. For instance, a 0.2–0.8 percentage point increase in g-fees could raise annual mortgage payments by $500–$2,000 for the typical homebuyer. While such adjustments might deter affordability, they could also attract private capital by aligning risk and return.

Capital Markets: Liquidity, Private Participation, and Structural Resilience

The GSEs' role in securitizing mortgages into mortgage-backed securities (MBS) has been pivotal in sustaining the To-Be-Announced (TBA) market-a uniquely American innovation that ensures liquidity for 30-year fixed-rate mortgages according to SIFMA's analysis. Disruptions to this market, however, could widen MBS spreads and elevate borrowing costs. For example, a shift in investor perceptions of default risk might increase mortgage rates by 0.2–0.8 percentage points.

To mitigate these risks, reforms must prioritize mechanisms that channel private capital into the housing finance system. Primary Mortgage Insurance (PMI) and Credit Risk Transfer (CRT) programs already place private capital in a first-loss position, shielding taxpayers while fostering market discipline as the National Housing Center notes. Expanding these tools could enhance resilience without relying on government guarantees. Additionally, the proposed Housing Capital Bridge aims to create a scalable, institutionally investable market. Such innovations could reduce reliance on the GSEs' conforming loan channel and diversify capital sources.

Economic Growth: Balancing Affordability and Stability

The GSEs' contributions to economic growth are undeniable. By providing liquidity to the housing market, they support construction, job creation, and wealth generation through homeownership. However, their dominance also creates fragility. For instance, the Federal Reserve Bank of Atlanta's Affordability Index highlights how rising home prices and interest rates have eroded housing accessibility since the pandemic. Reforms must address this tension by fostering competition and innovation.

A key challenge lies in maintaining affordability while reducing systemic risks. The Trump administration's focus on preserving the 30-year fixed-rate mortgage and TBA market reflects this balance. Yet, without a government backstop, private investors may demand higher returns, potentially raising mortgage rates and reducing credit availability for low-income households as New York Life Investments observes. Policymakers must also consider the broader economic ripple effects: a sudden withdrawal of GSE liquidity could destabilize the housing market, with cascading impacts on construction, employment, and consumer spending.

Challenges and the Road Ahead

The path to reform is fraught with complexities. The GSEs' capital shortfall-$33 billion for Fannie Mae and $162 billion for Freddie Mac as of Q1 2025 necessitates either private equity infusions or IPOs. However, these steps risk complicating the regulatory treatment of MBS and affecting banks' liquidity ratios as SP Global reports. Moreover, the implicit guarantee, which underpins investor confidence, remains politically contentious. Ending conservatorship could introduce uncertainty, potentially widening MBS spreads and increasing mortgage costs as Harvard's JCHS blog reports.

Legislative action will be critical. For example, forgiving the Treasury's senior preferred shares or converting them into common equity would require congressional approval. Meanwhile, the FHFA's updated housing goals for 2026–2028 emphasize supporting low- and moderate-income households through single-family and multifamily lending. These goals must align with market realities, such as high home prices and interest rates, to avoid exacerbating affordability challenges.

Conclusion: A Delicate Equilibrium

The reform of Fannie Mae and Freddie Mac is not merely a technical exercise but a test of balancing market forces with public responsibility. Unlocking private capital participation while preserving the GSEs' role in maintaining liquidity and affordability requires careful calibration. The Trump administration's market-based approach-prioritizing public offerings and private risk-bearing-offers a promising framework, but its success depends on addressing capital shortfalls, regulatory clarity, and the preservation of the TBA market as the National Housing Center notes.

As the housing finance system evolves, stakeholders must remain vigilant. The lessons of the 2008 crisis underscore the dangers of unchecked risk-taking, while the post-pandemic housing boom highlights the need for inclusive growth. By fostering a resilient, diversified capital market, the U.S. can ensure that homeownership remains accessible while safeguarding against future crises.