Trump Plan Could Make It Harder for First-Time Homebuyers To Get Mortgages

A proposed rule that would lower Fannie Mae and Freddie Mac’s affordable housing goals could make it harder for first-time homebuyers to get a mortgage, advocates at the nonprofit Consumer Federation of America (CFA) warned.
The Federal Housing Finance Agency (FHFA) usually updates the housing goals for the two mortgage financing giants every three years, and it last went through this process in 2024. However, Trump-appointee Bill Pulte, the new FHFA director, pushed forward a proposal earlier this month for a mid-cycle change that could alter the housing goals for 2026 through 2028.
“This new proposal will make our housing crisis worse and further limit access to homeownership, especially for first-time homebuyers,” Sharon Cornelissen, the CFA director of housing, said in a report shared with Newsweek.
What Are Fannie Mae and Freddie Mac’s Housing Goals?
Fannie Mae and Freddie Mac buy mortgages from lenders and either hold these mortgages in their portfolio or package them into mortgage-backed securities. Their activities help lower mortgage costs for everyday Americans. Together, the two companies—which have been under government conservatorship since the Great Recession of 2008—guarantee over a half of all U.S. mortgages.
Under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008, Fannie Mae and Freddie Mac must increase mortgage access for low- and moderate-income borrowers, underserved communities, and affordable multifamily development.
Every year, the FHFA sets annual targets for the percentage of mortgages Fannie Mae and Freddie Mac must purchase to serve these borrowers and communities.
How Does the FHFA Want To Change These Goals?
The 87-page proposed change would merge minority and low-income home purchase goals and lower the new proposed benchmark level for that combined group.
According to the FHFA, the move “simplifies the goal determination process” by replacing the “two area-based subgoals with one low-income areas subgoal.” It also “clarifies inflation adjustments to maximum civil money penalties related to housing goals, and makes other technical changes.”
According to the proposal, which was published in the Federal Register on October 2, the change would be justified by concerns that the housing goals might have “unintended consequences that harm borrowers, lenders, and the market.” Of “particular concern,” according to the document, “is feedback from lenders that they have turned away middle-class borrowers or increased prices on middle-class borrowers in pursuit of meeting housing goals.”
The FHFA has said there is no hard data backing this feedback from lenders. Still, the agency said these claims “suggest that the benchmarks for the housing goals have been set too high.”
The FHFA’s concern is that “aggressive” housing goals may have pushed up the cost of housing for middle-class borrowers. According to the agency, lowering the existing housing goal benchmarks will help it “collect and analyze comprehensive data on lending patterns, pricing structures, and borrower outcomes.”
What Could This Mean for Homebuyers?
Consumer advocates have warned that the change could make it even harder for some families to get mortgages.
“In his proposed rule, multifamily and refinance goals remain unchanged, but the goals for affordable home mortgages are lowered so much that they no longer present goals to aim for, but instead give Fannie Mae and Freddie Mac free reign to pull back from supporting lower-income to moderate-income homebuyers,” the CFA wrote.
“The proposed goals are set below the expected private market delivery of affordable mortgages, based on FHFA’s market forecasts,” it added.
According to the organization, the proposed rule would favor real estate investors rather than middle-class buyers. “By zero-ing out the Affordable Housing Goals, they are prioritizing the profits of real-estate investors over the ability of everyday working families to buy their first home,” the CFA wrote.
“The Affordable Housing Goals now serve hundreds of thousands of homebuyers every year in communities all around the country. Weakening these goals not only puts homeownership further out of reach for working families, but also undermines Congressional intent,” the organization added.
The CFA pointed to studies that showed Fannie Mae and Freddie Mac’s housing goals had helped low- and moderate-income families achieve homeownership in the decades since they were introduced, while also lowering costs for borrowers in those areas. According to a 2002 study by the U.S. Department of Housing and Urban Development, borrowing costs are lower in the markets where Fannie Mae and Freddie Mac purchase a higher proportion of conventional loans.
What Happens Next
It remains to be seen whether the FHFA will adopt the proposal. The agency is accepting written feedback on the proposed rule change through November 3.