President Donald Trump announced a plan to buy $200 billion in mortgage bonds to help lower mortgage rates and reduce home loan costs. This bond purchase will be made by Fannie Mae and Freddie Mac, two government-backed mortgage securitizers. The plan will be carried out under the direction of Bill Pulte, who leads the Federal Housing Finance Agency.
Mortgage-backed securities are groups of home loans that are sold to investors. When more bonds are purchased, the interest paid on them decreases, which can result in lower mortgage rates. Higher demand pushes interest rates lower, which reduces monthly mortgage payments for homebuyers.
The bond purchases will help to lower mortgage interest rates, making it easier for homebuyers to qualify for mortgages and manage monthly payments.
The plan may have a smaller effect because Fannie Mae and Freddie Mac do not have unlimited funds. Buying large amounts of mortgage bonds also increases financial risk for both agencies.
Mortgage rates are only one part of housing affordability. A lack of available homes continues to push prices higher. Building more homes is needed to improve affordability, even if rates fall.
The announcement highlights housing costs ahead of the 2026 elections. The impact on mortgage rates and the housing market will depend on how quickly the bond purchases are made and whether additional housing policies are implemented.
For mortgage related questions, please feel free to call Bluefire Mortgage Group at (760) 930-0569.
