The Freddie Mac sign will be seen on October 9, 2024 at its headquarters campus in Tyson Corner, Virginia.
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Bill Prute, the newly confirmed director of the federal housing finance agency that oversees mortgage giants Fannie Mae and Freddie Mac, said they would not reduce the limit on conforming loans or the maximum value of the loans the two companies purchase and guarantee.
That limit is calculated annually according to current home prices. It is currently $806,500, an increase of $39,950 (or 5.2%) since 2024.
“We have no plans to do anything because it relates to conforming loan restrictions,” Pulte said Tuesday.
The Trump administration has promoted plans to reduce the federal government, and many hope to work to reduce the size of Fannie May and Freddie Mac. The mortgage giant guarantees a large portion of the country’s $12 trillion mortgage market.
“People close to it have frustrated that the government is guaranteeing $1 million in mortgages that mortgage rates for Jumbo borrowers need to increase to support that. All of these can be very sensitive to timing and interest rates.”
FHFA has overseen two companies since entering the reserve in 2008. The recent appointment of Pulte has swirled questions about what he is going to do with the two, including whether he will move to lower the limit on conformance loans. Pulte toured the offices of Fannie Mae and Freddie Mac last week, posting videos of empty offices, desks and even cafeterias on social media.
In a recent report, the Cato Institute, a Washington, D.C.-based think tank, has promoted the idea that Congress should limit the FHA single-family insurance portfolio to first-time home buyers.
“In addition, the FHA should reduce the value of the loan limits covered by the FHA single family mortgage insurance to the first quartile of home prices (at best),” the report states.
