The Federal Housing Finance Agency (FHFA), together with the U.S. Department of the Treasury, announced amendments to the Preferred Stock Purchase Agreements (PSPAs) for Fannie Mae and Freddie Mac, deleting certain previously suspended provisions and making other modifications that increase the enterprises’ flexibility while clarifying the continued applicability of FHFA’s capital requirements. The amendments remove PSPA provisions that had been suspended under a September 14, 2021 letter agreement, confirm that the enterprises must meet FHFA capital requirements as amended over time, and include technical changes or clarifications related to financial reporting. They also reinstate Treasury’s written consent right, which existed in the original September 2008 PSPAs, as a prerequisite to terminating the conservatorships, alongside an agreed principle that any path to termination should be based on the enterprises’ financial condition and potential housing market impacts. A separate side letter between FHFA and Treasury sets out a process for considering conservatorship termination options other than receivership, including seeking public input, briefing the Financial Stability Oversight Council, and analyzing market impacts of different exit paths before Treasury consent is sought.
Federal Housing Finance Agency 2025-01-02
United States Federal Housing Finance Agency and U.S. Treasury amend preferred stock purchase agreements and restore Treasury consent right for ending Fannie Mae and Freddie Mac conservatorships
The Federal Housing Finance Agency and the U.S. Treasury amended the Preferred Stock Purchase Agreements for Fannie Mae and Freddie Mac, enhancing flexibility and clarifying FHFA capital requirements. Amendments remove suspended provisions, reinstate Treasury's consent right for conservatorship termination, and outline a process for exploring termination options beyond receivership. A side letter details steps for public input and market impact analysis before seeking Treasury consent.