While the Fed is moving away from purchases of agency MBS, portfolio managers at PIMCO believe additional purchases are warranted. In the meantime, the GSEs are increasing their investments.

The Trump administration continues to tease a 2025 capital raise for the GSEs but industry experts remain skeptical this can be done in a safe, sound manner.

New rep and warrant relief at Fannie; ADUs for manufactured homes at Freddie.

Holdings of both mortgage-backed securities and mortgages increased during the third quarter.

Amid pressure from some lender trade groups, Fannie Mae and Freddie Mac increased their investments in agency MBS during the third quarter. The move can drive down mortgage rates and goose GSE profits. (Includes data table.)

Beginning in December, the Federal Reserve will adjust its balance sheet strategy and no longer reinvest proceeds from payoffs of agency MBS into more MBS.

The prospects of a year-end stock offering didn’t prevent the wholesale reshuffle in Fannie Mae leadership.

Although the Trump administration says it wants the GSEs to help accelerate development by the big homebuilders, the topic barely registered during recent earnings calls.

If Fannie capital had been at mandated levels, the enterprise would have had an annualized ROE of 10.3% in the third quarter.

“Treasury is focused on ensuring that modernization of our capital framework ends the arbitrage that drives bank lending to nonbanks,” said Treasury Secretary Scott Bessent.