The U.S. President, Donald Trump, stated on Thursday that he has instructed the purchase of $200 billion in mortgage bonds in an effort to reduce interest rates and monthly payments for Americans seeking to own a property.
"As I decided not to sell Fannie Mae and Freddie Mac during my first term, they are now worth many times that amount — a true fortune — and have $200 billion in cash, therefore, I am instructing my representatives to buy $200 billion in mortgage bonds," Trump wrote on his Truth Social network.
Fannie Mae and Freddie Mac are two of the main U.S. government-sponsored enterprises that stabilize the national real estate market by purchasing mortgages from banks.
Trump stated that the measure he claims to have ordered "will lower mortgage rates, monthly payments, and make the cost of homeownership more affordable."
Traditionally, the Federal Reserve has been the largest buyer of mortgage-backed securities, and generally when the Fed or another entity like government-sponsored enterprises purchase significant volumes of mortgage-backed assets, particularly mortgage bonds, interest rates on property loans decrease.
On several occasions, most recently last year, Trump has proposed plans to privatize Fannie Mae and Freddie Mac, mainly through large initial public offerings (IPOs).