President Trump Directs $200 Billion Mortgage Bond Purchase to Lower Housing Costs

President Donald Trump announced on Thursday that he has directed his representatives to purchase $200 billion in mortgage bonds through government-controlled entities Fannie Mae and Freddie Mac. The initiative aims to lower mortgage rates, reduce monthly payments, and make homeownership more affordable for Americans.

"This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable," Trump stated in a social media post.

Fannie Mae and Freddie Mac, under government conservatorship since the 2008 financial crisis, have reportedly accumulated substantial cash reserves. Trump highlighted that their combined value has increased significantly, providing the necessary funds for this bond purchase.

Economists and industry experts have expressed skepticism about the plan's potential impact. Daryl Fairweather, chief economist at Redfin, noted that while the move might lower mortgage rates by 0.25 to 0.5 percentage points, it may not significantly ease the affordability crisis or reverse the "mortgage rate lock-in" effect that keeps existing homeowners from selling.

Additionally, concerns have been raised about the financial stability of Fannie Mae and Freddie Mac. Utilizing $200 billion for bond purchases could deplete their capital buffers, making them more vulnerable to economic downturns.

The housing market has faced challenges with elevated mortgage rates and high home prices, deterring many potential buyers. While mortgage rates have declined from around 7% earlier in 2025 to approximately 6.16%, housing demand has shown little sign of a sustained recovery. Analysts estimate that the bond purchases could lower borrowing costs by roughly 10 to 15 basis points.

This directive comes ahead of the upcoming midterm elections, reflecting efforts to address voter concerns on housing affordability.