Fannie, Freddie Allowed to Boost Capital Buffers by Billions
- Fannie allowed to hold $25 bln, and Freddie can retain $20 bln
- Treasury, FHFA announcement part of effort to end U.S. control
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Fannie Mae and Freddie Mac will be allowed to boost their capital by billions of dollars to protect against potential losses, a key step in the Trump administration’s push to free the mortgage giants from U.S. control.
Fannie will be permitted to retain earnings until its capital buffer hits $25 billion, while Freddie will be allowed to hold $20 billion, the Treasury Department and the Federal Housing Finance Agency announced Monday. Last year, Fannie reported net income of $16 billion and Freddie made $9.2 billion, signaling it could take more than a year for the companies to reach the administration’s new goal.