The Federal Housing Finance Agency and the Treasury Department have reached an agreement that will allow Fannie Mae and Freddie Mac to keep their earnings for the foreseeable future.
The FHFA and Treasury agreed to amend the preferred stock purchase agreements for the shares in the two enterprises that the federal government continues to hold following the Great Recession. The amendments will let Fannie and Freddie retain all earnings until they have reached the requirements set by FHFA’s new capital rule issued late last year. Under that rule, the two mortgage giants would have been required to hold $283 billion in unadjusted total capital as of June 30, 2020, based on their assets at the time.
In 2019, the two agencies reached an agreement to let the mortgage giants retain up to a combined $45 billion in earnings — $25 billion for Fannie Mae and $20 billion for Freddie