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What Does Project 2025 Say?

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On November 5, 2024, the United States Elected Donald J. Trump to a second term. The day after that, his allies gleefully admitted that Project 2025 was their – and his – agenda the entire time.

This is what we’re up against.

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On November 5, 2024, the United States Elected Donald J. Trump to a second term. The day after that, his allies gleefully admitted that Project 2025 was their – and his – agenda the entire time.

This is what we’re up against.

Check My Voter Registration
Register To Vote
“Treasury plays a role in funding the conservatorships of Fannie Mae and Freddie Mac. It should work to end the conservatorships and move toward privatization of these massive housing finance agencies. This would restore a sustainable housing finance market with a robust private mortgage market that does not rely on explicit or implicit taxpayer guarantees.”
Citation: Project 2025, Section 4.2: Department of the Treasury, William L. Walton, Stephen Moore, and David R. Burton, page 738, paragraph 2
Context:

This would not, by any means, “restore a sustainable housing finance market.”

Fannie Mae and Freddie Mac buy mortgages from lenders, pool them, then sell them as mortgage-backed securities (MBSs) to investors. This process injects liquidity into the mortgage market, enabling banks to offer loans at lower rates.

Without government backing, the risk associated with Fannie Mae and Freddie Mac’s securities would increase. Investors would demand higher returns to compensate for that risk, leading to higher interest rates for homebuyers. This will make homeownership even less affordable for average Americans.

Fannie Mae and Freddie Mac also ensure the availability of the 30-year fixed-rate mortgage – a staple of the American housing market – by purchasing these loans from lenders. Their guarantee of these mortgages gives lenders confidence to offer them widely. Privatizing these might reduce access to or eliminate the availability of 30-year mortgages, which are seen as risker for investors due to their long term. This means that homebuyers might have to rely on shorter-term or adjustable-rate mortgages.

As GSEs, Fannie Mae and Freddie Mac have mandates to promote affordable housing and serve a broader segment of the population. They help maintain access to mortgage credit for low- and middle-income borrowers. Privatization would shift the focus of these institutions to maximize profits rather than public policy goals. This means less access to affordable housing for low- to middle-income buyers.

In short, privatizing Fannie Mae and Freddie Mac would likely lead to higher mortgage rates, reduced availability of the 30-year fixed-rate mortgage, less access to credit for low- and middle-income borrowers, and potentially greater market volatility. While it could reduce government risk exposure – which is no doubt what the authors want – it would shift the focus from the greater good to maximum profitability, which will reduce access to housing for millions of Americans.

Full contextual analysis of Section 4.2: Department of the Treasury here.

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