Why Fannie Mae and Freddie Mac for the First Time Aren’t on Power Finance

The future of Fannie Mae and Freddie Mac has remained in limbo since President Donald Trump returned to the White House last year, causing the two mortgage market giants’ influence to be severely diminished. Or, at least, difficult to assess.

The Trump administration laid the groundwork in August 2025 for a privatization of the government-sponsored enterprises. Meetings were held with the six largest banks, and plans were put in motion to sell up to $30 billion in preferred shares of Fannie and Freddie on the open market. 

The federal government’s conservatorship of the GSEs has been in place since September 2008, and the timing and specifics of ending that oversight remain up in the air. The speculation alone, however, has sparked concerns about a profit-driven plan that would lead to higher mortgage rates, stricter underwriting for multifamily loans, and higher loan-to-value ratios. Fannie and Freddie face the prospects of a prolonged purgatory, since a potential privatization would require major regulatory changes with new capital requirements that could delay such a move past the completion of Trump’s term in January 2029. 

Given the growing uncertainty of Fannie and Freddie under the Federal Housing Finance Agency (FHFA), we decided to take a wait-and-see attitude in this year’s Power Finance rankings, despite both agencies long being staples on the list. It was just five years ago that the GSEs took the No. 1 and No. 2 spots in Power Finance for the stability they brought to the multifamily market during the market volatility of the COVID-19 pandemic.

Despite major staff cuts at Fannie and Freddie last year implemented by Bill Pulte, director of the FHFA who was also named head of Fannie and Freddie in March 2025, both GSEs posted sluggish earnings in the 2025 fourth quarter. Fannie Mae’s fourth-quarter net income dropped 14.6 percent from the same period in 2024, with Freddie Mac’s falling similarly at 14 percent, and both agencies spiking their provisions for credit losses. 

While Fannie and Freddie’s overall power in commercial real estate has been altered over the last year, each can still play an important role in tackling housing affordability, regardless of how the entities are constructed. Their impact is based largely on what policy actions are taken at the federal level. 

“Fannie Mae and Freddie Mac are essential to the availability of affordable mortgage credit across the country, for both single-family homeowners and the multifamily housing stock that serves millions of renters,” said Sam Chandan, director of the Chen Institute for Global Real Estate Finance at New York University. “The current conversation about the future of the enterprises is a consequential one, and it deserves a level of engagement that reflects their systemic importance.”

Andrew Coen can be reached at acoen@commercialobserver.com.