Trump's Bold Moves On Housing - The Commonwealth Group Perspective
As leaders in mortgage fulfillment and consulting at The Commonwealth Group, we're closely monitoring developments in the housing market that could reshape affordability, lending practices, and opportunities for American homebuyers. With over two decades of experience providing end-to-end services—from processing and underwriting to quality control and compliance—we understand the intricacies of the mortgage ecosystem. Recent announcements from President Trump signal significant shifts aimed at tackling ongoing problems in housing. In this post, we'll break down two key initiatives: the directive for Fannie Mae (FNMA) and Freddie Mac (FHLMC) to purchase $200 billion in mortgage-backed securities (MBS), and the planned executive order to restrict institutional investors from acquiring single-family homes.
The $200 Billion MBS Purchase: A Push to Lower Mortgage Rates
On January 8, 2026, President Trump announced via Truth Social that he is instructing his representatives to direct Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities (MBS). This move leverages the substantial cash reserves accumulated by these government-sponsored enterprises (GSEs) since their 2008 conservatorship, which Trump credits to his decision not to privatize them during his first term.
The goal is straightforward: by purchasing existing MBS from the public market, the GSEs aim to inject liquidity, drive down yields on these securities, and ultimately reduce mortgage interest rates for consumers. FHFA Director Bill Pulte has confirmed that Fannie and Freddie will execute this by acquiring MBS directly from the secondary market, potentially spreading the purchases over the course of 2026 to avoid market disruptions.
From our perspective at The Commonwealth Group, this could be a game-changer for the industry. Lower rates—already dipping below 6% in response to the announcement—may stimulate refinancing activity and encourage first-time buyers who have been sidelined by high costs. However, economists have raised concerns that this "People's QE" approach might inflate home prices in the long term if demand surges without corresponding supply increases, potentially exacerbating affordability issues. At The Commonwealth Group, our economic teams do not agree with that assessment. We believe that lowered interest rates will allow current homeowners who have been reluctant to place their homes on the market due to the “lock-in effect” will now consider placing their homes on the market. They will be able to realize their equity appreciation and a more acceptable rate for a new purchase. We believe that housing appreciation will be more moderate than many economists - not as familiar as they think they are with the dynamics of the housing market - expect.
Lenders and servicers should prepare for heightened volume in originations and ensure compliance with evolving GSE guidelines. Our teams at Commonwealth offer specialized services to help Banks, Credit Unions, and Independent Mortgage Bankers (IMBs) navigate these changes seamlessly.
Executive Order to Curb Institutional Purchases of Single-Family Homes
Just a day earlier, on January 7, 2026, President Trump revealed plans to immediately implement steps banning large institutional investors- such as Wall Street firms and private equity groups- from purchasing additional single- family homes. He emphasized that "people live in homes, not corporations," framing the policy as a direct response to corporate ownership driving up prices and squeezing out individual buyers. While details are still emerging, the administration is drafting a broader executive order that could include this ban, along with provisions allowing Americans to tap into retirement or college savings accounts for down payments. Trump has also called on Congress to codify the restriction into law, with bipartisan support already voiced by figures like Senate Banking Committee Ranking Member Elizabeth Warren.
This policy targets the growing footprint of institutional investors, who in some markets like Atlanta and Tampa own over 15% of rental homes. By limiting their ability to expand portfolios, the order seeks to level the playing field for families and reduce upward pressure on home values. At The Commonwealth Group, we see potential benefits for retail mortgage origination, as more properties could become available to individual purchasers. That said, the ban could disrupt rental markets and affect investors' strategies, prompting a need for enhanced due diligence in portfolio reviews- a service we provide through our quality control and consulting expertise.
Industry reactions have been mixed: stocks for major residential investment firms dropped following the announcement, while homebuilders and affordability advocates have welcomed it. States like California, under Governor Gavin Newsom, are echoing these sentiments with their own regulatory pushes against large-scale investor ownership. We'll be watching closely for the full executive order, expected soon, and its implications for compliance and market dynamics.
Looking Ahead: Opportunities and Challenges in a Shifting Market
These initiatives reflect a proactive stance on housing affordability, a critical issue as we enter 2026. By bolstering MBS purchases and restricting institutional dominance, the administration aims to make homeownership more attainable amid record-high prices inherited from previous policies. At The Commonwealth Group, we're committed to supporting our customers through these transitions with flexible, compliant solutions that drive efficiency and profitability.
Whether you're a lender adapting to lower rates or navigating new investor restrictions, our team is here to help. Contact Martin Luplow at [email protected] for more information. Whether your company is a bank, credit union, or IMB, Commonwealth and Condoanalytics have the resources you need. Visit www.thecommonwealth.net to learn more about our services, including contract underwriting, condo project reviews, and operational consulting. Or if your needs are for are for condo project reviews and certifications, reach out to Nick De Santis at [email protected] . They have the expertise and experience your company needs to deal the complexities of the condo market.
Stay tuned for updates as these policies unfold—The Commonwealth Group and Condoanalytics will continue providing insights to keep your company ahead in the mortgage landscape.
West Beibers, CMB, AMP, CRU
Chief Executive Officer
The Commonwealth Group Companies