FHFA, Treasury Modify Fannie Mae, Freddie Mac Conservatorship Agreements

The Federal Housing Finance Agency (FHFA) and the U.S. Department of the Treasury on Jan. 3 announced amendments to the Preferred Stock Purchase Agreements that govern the conservatorships of Fannie Mae and Freddie Mac (the Enterprises).

The amendments set out a process meant to ensure a smooth transition from conservatorship and reassure stakeholders that the Enterprises' eventual release from conservatorship will minimize disruption to the housing and financial markets.

The updated agreements between FHFA and Treasury require the Enterprises to meet the capital requirements previously established by FHFA and restore the right of Treasury to consent to the termination of their conservatorships.

Additionally, FHFA and Treasury have agreed that FHFA must seek public input on conservatorship termination options and potential effects of termination on the housing market to present to Treasury before requesting consent.

In a press release, FHFA said that these changes provide Fannie Mae and Freddie Mac with more flexibility to better support access to homeownership and rental housing.

View the letter agreements.