The past and current politics of housing finance and the future of Fannie Mae, Freddie Mac, and homeownership in the United States

Rather than focusing on the dearth of mortgage lending, however, suggested legislation in both the US Senate and the House of Representatives prioritizes winding down the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp (Freddie Mac), channeling their business and thus profits to private financial firms. The justification for the termination of Fannie Mae and Freddie Mac is that greater levels of private capital in the housing finance system will protect US taxpayers from future bailouts. Interestingly, private capital was not in short supply in the years leading up to the implosion of the housing finance market. This article examines the establishment and the charters of Fannie Mae and Freddie Mac, the evolution of more than two decades of actions to reduce or remove their special preferences, the current status of Fannie Mae and Freddie Mac, and the current ongoing housing finance reform debates on Capitol Hill.