What If Fannie Mae & Freddie Mac Went Public — and What It Could Mean for Home Buyers in San Antonio

Could privatizing Fannie Mae and Freddie Mac impact mortgage rates and your ability to buy a home in San Antonio? Probably — so here’s what you need to know.

 What’s Happening — and Why It Matters

• Fannie Mae and Freddie Mac have long served as the backbone of U.S. home financing, buying mortgages from lenders, bundling them into securities, and providing the liquidity that enables widespread 30‑year fixed-rate mortgages. (New American Funding)
• In 2008, after the financial crisis, both were placed into conservatorship under federal oversight to stabilize the housing finance system. (neamgroup.com)
• As of late 2025, policy makers and regulators have renewed talk of taking them public again — either through a full IPO or a partial restructuring of their charters — potentially as soon as the end of the year. (Yahoo Finance)
• What shape the restructuring takes — for example, whether the government retains explicit guarantees or backs off — will have major implications for the mortgage market, housing affordability, and the broader economy. (neamgroup.com)

Given that these two entities currently back a large share of U.S. mortgages, this isn’t a small regulatory tweak — it could reshape home financing across the country. (New American Funding)

 Potential Upsides of Making Fannie and Freddie Public

Privatizing or re‑chartering Fannie Mae and Freddie Mac could bring several advantages — especially if done carefully:

• Reduced taxpayer risk / government liability: As private firms, the entities’ capital requirements and loss exposure would lie with shareholders rather than average Americans, potentially protecting taxpayers in the event of another housing downturn. (neamgroup.com)
• Greater efficiency, innovation, and competition: A privatized market could foster more competition among guarantors and lenders. This could translate into more choices, new loan products, and possibly even better pricing or more creative financing for some buyers — particularly if a diversified secondary market emerges beyond just two giant entities. (Urban Land)
• Potential for more stable, long-term private capital: Freed from the constraints of government conservatorship, a well‑capitalized private GSE might leverage private capital efficiently and build a sustainable model — possibly supporting robust mortgage markets. (faculty.haas.berkeley.edu)

Depending on design, this could create a more market-driven, flexible mortgage finance system.

 Risks and Downsides — What Could Go Wrong

But the transition carries real risks. Here’s what could go sideways:

• Higher mortgage rates and borrowing costs: Without the “implicit guarantee” that the government will bail out GSEs in a crisis, investors in mortgage-backed securities would demand higher returns — which lenders would pass on as higher interest rates. (Luxembourg)
• Tightened credit standards: As private firms with shareholder responsibilities, Fannie and Freddie might tighten underwriting criteria, making it harder for first-time buyers, buyers with moderate incomes or less‑than-perfect credit, or self-employed/gig‑economy buyers to qualify. (New American Funding)
• Potential loss of the 30‑year fixed-rate loan dominance: Some analysts believe mortgage financing could shift toward shorter or adjustable-rate products if private guarantors are reluctant to absorb long-term risk — which could increase payment uncertainty for many borrowers. (floify.com)
• Market volatility and instability in times of stress: Without a clear government backstop, mortgage-backed securities (MBS) markets could become less liquid and more fragile — which could exacerbate housing market downturns or credit squeezes. (neamgroup.com)
• Reduced access for lower-income or marginalized communities: Historically, the GSEs have helped extend homeownership to underserved groups. Privatization could reduce that mission focus, widening inequalities. (HUD User Archives)

 What Could This Mean for Mortgage Rates and Housing Market Dynamics

If privatization happens quickly and without strong explicit guarantees:

• Mortgage rates could trend upward, potentially by 0.5–1 percentage point or more compared with current rates, to reflect higher investor risk. (Harris Beach Murtha)
• Borrowing and down‑payment requirements could tighten, reducing the pool of qualified buyers — particularly among first‑time buyers and those with borderline credit. (New American Funding)
• The iconic 30‑year fixed-rate mortgage could become less common or more expensive — potentially shifting some demand toward adjustable-rate or other loan products. (floify.com)
• Overall housing demand might shrink — especially among entry-level and mid-income buyers — which could dampen home sales. At the same time, rents could rise if demand shifts toward rentals. (Innovative Mortgage Brokers)

 What This Could Mean for the San Antonio Market (2026 and Beyond)

As a Realtor with nearly two decades helping buyers in San Antonio, here’s how I’m watching this — and what clients should consider:

• Affordability may tighten: If mortgage rates edge higher and underwriting gets stricter, pockets of the market where first-time buyers typically compete — entry-level homes, starter condos, modest single-family houses — could become more difficult to finance. That may push some buyers out of the market or force them to consider renting longer.
• Demand shift and slower sales growth: San Antonio, historically more affordable than many major metros, could see fewer first-time and moderate-income buyers. This could slow the pace of sales, especially among lower to mid-tier homes, and put pressure on price appreciation.
• Potential rise in rental demand: If homeownership becomes harder to finance, demand for rentals could go up — boosting the attractiveness of investment properties, but also potentially increasing rents in certain neighborhoods.
• Opportunity for savvy investors and cash buyers: As financing becomes more expensive or harder to obtain, cash buyers or buyers with strong credit and capital may have an advantage — the “low supply, high demand” dynamic could shift somewhat in their favor.
• Long-term implications uncertain — but planning matters: If the privatization process is done carefully — with explicit guarantees, regulatory guardrails, and possibly new or competing guarantors — San Antonio’s market could adapt. But if the transition is rushed or lacks clarity, we could see significant friction, especially for buyers sensitive to rates or credit barriers.

 My Take — What Homebuyers in San Antonio Should Do Now

If you’re thinking about buying a home in 2026 (or beyond), here’s what I suggest:

• Don’t wait assuming rates will stay where they are. If privatization pushes rates up, acting sooner could save you thousands over the life of a loan.
• Get your financial ducks in a row. Clean credit, stable income, and a solid down payment will matter more than ever.
• Watch for policy and regulatory updates. The shape of privatization — especially whether government backing remains explicit — will drive mortgage availability and pricing.
• Consider locking in a 30‑year fixed mortgage early. If you qualify now, securing a long-term fixed rate before volatility sets in may provide stability.
• If investing, think long-term. Rental demand could rise — but so could financing costs. Analyze cash-flow carefully, and maybe shift toward properties that make sense even if rates climb.

 Final Thought

Privatizing Fannie Mae and Freddie Mac could bring long-term structural improvements to the housing finance industry — increased efficiency, reduced taxpayer risk, and potential innovation in mortgage products. But the transition carries real risks: higher mortgage rates, tighter credit, and less accessibility, especially for first-time or moderate-income buyers. For the San Antonio market, this could tighten affordability and reshape who can buy and how homes change hands.

As someone who’s helped buyers navigate the ups and downs of this market for 18 years, I believe the key is staying informed — and acting with intention. If you’re considering buying a home, or just want to explore your options, now might be the time to talk.