The head of federal regulators at Fannie Mae and Freddie Mac said he is willing to get the mortgage giants to cooperate with President Trump’s plan to stop institutional investors from increasing purchases of single-family homes, but it is up to the president to announce the details.
“We have a lot of tools that we can leverage,” Federal Housing Finance Agency Commissioner Bill Pulte said Thursday in an appearance on CNBC. “It’s up to the president to decide what to do if that happens.” [tools] He wants to use it with Fannie and Freddie and we are ready to make sure that happens. ”
As he and the president did last fall, Mr. Pulte criticized home builders, saying institutional investors “buy a lot of homes” from home builders and “could get a better deal,” dismissing the growing “build-to-rent” market segment.
“Home builders need to focus on providing homes for people, not businesses,” Prut said.
The National Association of Home Builders said in a statement that any new policy “must not cut off funding for new construction, including rental housing, which is a critical source of new housing supply.”
“We appreciate President Trump’s efforts to increase homeownership opportunities and look forward to working with the administration on a wide range of policy proposals to do so,” NAHB President Buddy Hughes said in a statement to Inman.
Mr. Pruitt, who not only oversees regulation for Fannie Mae and Freddie Mac but also chairs the companies’ boards, stepped up his criticism of home builders in October after he claimed that President Trump had “left 2 million vacant lots unattended” and “asked Fannie Mae and Freddie Mac to put major home builders in operation.”
Fannie and Freddie typically do not provide financing directly to home builders, but instead purchase and guarantee the mortgages that many new home buyers take out. This has led many analysts to question how much influence Pulte, FHFA, Fannie and Freddie actually have over homebuilders.
Pruitt told an industry publication last fall that FHFA had begun a review of builder pricing, liquidity flows and mortgage fraud risk data associated with loans purchased by Fannie and Freddie, and that the review would shape how Fannie and Freddie interacted with individual builders.
FHFA has not yet announced a policy, but Pulte promised Thursday that “actions will be taken” to encourage home builders.
“Fannie and Freddie are providing billions of dollars worth of liquidity to builders,” Prut told CNBC. “We can change the price. We have a carrot and we have a stick approach.”
Rethinking the single-family rental debate
President Trump announced on Truth Social on Wednesday that he plans to ban large institutional investors from purchasing more single-family homes, and I will ask Congress to codify that.
This has renewed debate about whether such a “ban” is legal, or whether other measures that could prevent institutional investors from owning single-family homes, such as a sales tax proposed by Democrats in 2023, would deal a major blow to housing affordability.
California Gov. Gavin Newsom, a Democrat and Trump opponent, was scheduled to announce his own plan Thursday to work with the state Legislature on measures that could discourage investors from owning single-family homes.
“Many state and federal legislators view the growing presence of institutional investors in the single-family rental market as alarming,” Brittany Gjerstad McKnight, an assistant professor of commercial law at South Dakota State University’s Ness School of Business and Economics, wrote in a 2024 case study of bills introduced but not passed by the Minnesota Legislature.
“State laws that seek to impose limits on investor participation in the SFR market are likely to face legal challenges, especially if they are enacted with retroactive intent,” McKnight concluded.
Such laws can give rise to lawsuits based on constitutional issues such as potential violations of the Due Process Clause, Equal Protection Clause, and Takings Clause. Carefully drafted state laws could address these issues, but they could run afoul of the Commerce Clause’s principle of reserving the power to regulate interstate commerce to Congress.
“Many of the constitutional issues I have discussed at the state level are also likely to have implications for federal restrictions, depending on the scope and design of the law,” McKnight told Inman in an email.
There is also the question of how big an impact institutional ownership of single-family homes has on affordability.
A record 30 percent of single-family home purchases were made by investors in the first half of 2025, according to a recent compilation of research and news reports by the Federal Reserve Bank of St. Louis.
However, most of the increase in home sales to investors came from small, “mom and pop” investors.
St. Louis Fed researchers concluded that “large ‘institutional’ investors exert significant influence in the 20 major U.S. metropolitan areas in which they operate, but only account for a small portion of the national SFR market.” “In 2025, their share of single-family home purchases was only one-fifth that of mother-son investors.”
A 2024 analysis of Urban Institute data by the U.S. General Accounting Office concluded that 32 “institutional investors” (defined as owning 1,000 or more properties) owned 450,000 single-family homes in 2022, representing about 3 percent of the single-family rental (SFR) market.
This means that institutional investors control an even smaller portion of the total inventory of single-family homes, including owned and rented homes.
Institutional investors’ SFR market share
However, institutional investors hold a large share of the single-family rental market in some metropolitan areas, including Atlanta (25%), Jacksonville, Florida (21%), Charlotte, North Carolina (18%), and Tampa, Florida (15%), according to GAO’s analysis.
Another interesting finding in the GAO report is that after the Great Recession and Financial Crisis of 2007-2009, when 3.8 million households lost their homes to foreclosure, many single-family homes entered the rental market.
Under the Obama administration, FHFA launched an REO-to-rent pilot in 2012 that allowed for bulk sales of Fannie Mae-owned foreclosed properties to pre-qualified investors, angering real estate agents.
During the first Trump administration, FHFA authorized Fannie Mae to make a 10-year, $1 billion loan to Invitation Homes to purchase and manage single-family rental homes. Freddie Mac was also running a pilot program to provide liquidity to mid-sized (50 to 2,000 properties) investors in single-family rental properties.
GAO noted that FHFA ordered Fannie and Freddie to discontinue both efforts in 2018 after finding that “large institutional investors in single-family rental housing do not need additional liquidity.”
However, Sunbelt cities “continue to have the largest amount of institutional investment, although they initially experienced an influx of institutional investment following the financial crisis,” the GAO report concluded.
Congress remains deadlocked
Pruitt on Thursday reiterated the Trump administration’s assertion that Democrats, and Joe Biden in particular, are responsible for the rise in home prices and mortgage rates that are fueling today’s housing affordability crisis.
Democrats “have been talking about this for a long time,” Pruitt said. “They said, ‘Oh, we’d love to do that.’ President Trump is now taking action.”
But Trump’s Truth Social posts coincided with Democrats’ own push to make housing affordability an issue in the 2026 midterm elections.
The Trump administration has promised to make housing more affordable, but Democrats say that only encourages questionable ideas like 50-year mortgages.
“After the financial crisis, Wall Street took back foreclosed homes and is now using algorithms to fix rents and rack up junk fees,” Nidhi Hegde, executive director of the American Economic Freedom Project, said in a press release issued by Senate Democrats on Wednesday. “Today’s financialized homebuilding industry caters to Wall Street investors, restricting supply and inflating prices. And Donald Trump’s plans like 50 Year Mortgage and letting companies like RealPage go free only make the crisis worse.”
Republican Sen. Tim Scott, chairman of the Senate Banking Committee, boasted last year of working with Democratic Sen. Elizabeth Warren to push for comprehensive affordable housing legislation, the Renewed Opportunities in the American Dream (ROAD) Housing Act of 2025.
Much of the Housing ROAD Act, which the Bipartisan Policy Center called “the most impactful and comprehensive housing legislation since the Great Recession,” was incorporated into the defense spending bill, but died in the House in December.
Lenny Willis, CEO of the National Low Income Housing Coalition, said in a statement that bipartisan measures like the Housing ROAD Act are “essential to strengthening the housing safety net and reducing instability for the lowest-income renters.”
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