Why It Matters

The Federal Housing Finance Agency (FHFA) has scaled back affordable housing and fair lending requirements for Fannie Mae and Freddie Mac for 2026-2028, according to a new Congressional Research Service report. Congress has not passed comprehensive reform legislation, leaving all conservatorship management to administrative action by FHFA. These policy shifts reveal tension between competing mandates and have significant implications for both Congress and the administration.

The Big Picture

FHFA's recent policy shifts have reshaped the Enterprises' lending requirements. On March 24, 2025, FHFA rescinded Advisory Bulletin 2024-06 on Unfair or Deceptive Acts or Practices (UDAP) compliance. On March 25, 2025, FHFA eliminated the Enterprises' participation in Special Purpose Credit Programs (SPCPs). In July 2025, FHFA proposed repealing fair lending and equitable housing finance regulations, with the comment period closing in September 2025.

For 2026-2028, FHFA lowered several affordable housing goals for the Enterprises. The low-income home purchase goal was reduced from 25 percent to 21 percent, and the very low-income goal was reduced from 6 percent to 3.5 percent. The 2026 multifamily volume caps require a 50 percent minimum for mission-driven loans.

The January 2025 amendment to the preferred stock purchase agreement between Treasury and the Enterprises signals that any exit from conservatorship must rest on their financial condition and potential market impact. Yet neither branch has moved toward that outcome. H.R. 1209, introduced in the 119th Congress, would require the Treasury Secretary to submit completed proposals for terminating the conservatorships.

The Bottom Line

FHFA serves simultaneously as both regulator and conservator of Fannie Mae and Freddie Mac. Congress has not passed comprehensive GSE reform legislation. The policy reversals on lending protections, coupled with tightened affordable housing targets, suggest a departure from the secondary mortgage market's original mission to expand homeownership access. Without legislative action, the enterprises remain in conservatorship indefinitely, while the administration's regulatory choices reshape their role without resolving their legal status.

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