Federal Housing Finance Reform

This memorandum directs the Treasury Secretary to develop a plan for ending the conservatorships of Fannie Mae and Freddie Mac and reforming the housing finance system, and directs the HUD Secretary to develop a plan for modernizing FHA and GNMA programs. Both plans must distinguish legislative from administrative reforms and include implementation timelines for administrative actions, to be submitted to the President 'as soon as practicable.'

Federal Register Open PDF 84 FR 12479

Impact dates

Date TBD
Treasury Housing Reform Plan submission to President for approval

Key directives

Treasury Secretary shall develop Treasury Housing Reform Plan to end GSE conservatorships, facilitate competition, establish safety regulation, and ensure federal compensation for support
Treasury Housing Reform Plan must specify legislative vs. administrative reforms and include implementation timelines for administrative reforms
HUD Secretary shall develop HUD Reform Plan to shift FHA/GNMA to primary support for low- and moderate-income families, reduce taxpayer exposure, and modernize operations
HUD Reform Plan must specify legislative vs. administrative reforms and include implementation timelines for administrative reforms
Both plans require specified interagency consultations
Both plans to be submitted to President through Assistant to the President for Economic Policy 'as soon as practicable'

Who is ordered

Timeline

Immediate

Memorandum issuance and publication in Federal Register
Directive to Treasury Secretary to begin developing Treasury Housing Reform Plan
Directive to HUD Secretary to begin developing HUD Reform Plan

Near term (90d)

Development of Treasury Housing Reform Plan with consultation requirements
Development of HUD Reform Plan with consultation requirements
Specification of legislative vs. administrative reforms for each proposed reform
Creation of implementation timelines for administrative reforms

Long term

Potential end to GSE conservatorships upon completion of specified reforms
Expansion of private sector participation in housing finance market
Modernization of FHA and GNMA operations and technology
Potential restructuring of federal housing finance programs and risk exposure

Risks & tensions

No fixed deadline for plan submission—'as soon as practicable' creates uncertainty about timing and accountability
Ending GSE conservatorships requires complex balance between private market expansion and preserving 30-year fixed-rate mortgage access
Risk of disrupting mortgage market if reforms move too quickly or without legislative support
Potential tension between reducing taxpayer exposure and maintaining affordable housing access
QM Patch evaluation could affect mortgage credit availability
Conflicting goals of increasing private capital while preserving equal access for lenders of all sizes