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A topic we haven’t heard much about lately is suddenly back in the spotlight: ending government control of Fannie Mae and Freddie Mac.
This week, a House lawmaker said Republicans are drafting a bill to end the 18-year “conservatorship” of Fannie and Freddie and potentially move toward taking them public. The idea has been floated before, but the renewed push matters because these two companies sit at the center of the U.S. housing finance system.
So what exactly is happening—and why should investors pay attention?
Fannie Mae and Freddie Mac buy home loans from lenders (like banks), bundle those loans together, and sell them as investments to large institutions like pension funds and insurance companies. That process helps lenders recycle their money so they can issue more mortgages.
They were placed under government oversight after the 2008 financial crisis, when they needed taxpayer support. They’ve remained under government control ever since.
According to Realtor.com, the bill being discussed would aim to end that government control and potentially lead to taking the companies public. It’s still unclear what can be done without congressional action, and the details are not final.
The same report also notes lawmakers want to “lock in” some safeguards that were added after the financial crisis—things like higher capital standards and tighter limits designed to make the system less risky than it was pre-2008.
Because the housing market runs on financing. If Fannie and Freddie change how they operate—or how investors view the risk of mortgage-backed bonds—there’s a real possibility that mortgage rates could move higher.
Realtor.com reports that one concern raised in hearings is that investors may demand higher returns if they believe there is more risk, and that could push borrowing costs upward.
Even small increases in mortgage rates matter. When rates rise, monthly payments rise. And when payments rise, fewer people qualify—or buyers have to lower their budget and wait.
Here’s the practical chain reaction:
This is one reason we like value-add multifamily. Our target renter often isn’t choosing between a luxury apartment and a luxury home. They’re looking for a good place to live at a payment that makes sense—especially when the homebuying path feels expensive or uncertain.
This is not a “sky is falling” moment. It’s a developing policy story with a lot of steps left.
But we are watching a few key questions:
At Faris Capital Partners, our focus is not about predicting policy. It’s about building a portfolio that works through different conditions.
That’s why we like value-add apartments in markets with job diversity and strong renter demand. We buy communities at sensible prices, improve what residents use every day (kitchens, flooring, lighting, access, pet-friendly upgrades), and operate for renewals—not churn.
If mortgage rates stay high or rise, that can increase the number of households who choose to rent. Well-run apartments that offer “attainable quality” can become the practical choice.
This proposal may or may not move quickly, and the exact outcome is unknown. But the big idea is easy to understand:
If mortgages become more expensive or harder to get, more people rent longer. And when renting stays strong, apartments—especially affordable, well-managed ones—can remain a stable place to invest.
In Simple Terms: Fannie and Freddie help make mortgages easier and cheaper. If changes make mortgages more expensive, home buying gets harder, and renting can stay strong.
👉 If you’d like to be added to our investor list to see future opportunities like this one, please schedule a call with our team.
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