The U.S. Department of the Treasury and the Federal Housing Finance Agency have agreed letter amendments to the Preferred Stock Purchase Agreements with Fannie Mae and Freddie Mac aimed at supporting an orderly eventual release from conservatorship and reflecting existing practices. The package restores Treasury’s right to consent to a release of either government-sponsored enterprise from conservatorship and, through a separate FHFA side letter, establishes a commitment to solicit public input on potential market impacts before any release. The amended PSPAs also give Treasury a right to consent to any discretionary FHFA action to commence a receivership of the GSEs. Before terminating conservatorship other than through receivership, FHFA will issue a public request for information setting out one or more specific termination options and seek input on impacts on the housing market and the GSEs, brief the Financial Stability Oversight Council on the feedback including potential U.S. financial stability considerations, and then provide Treasury with a recommended approach; Treasury will consult with the President before consenting. Technical updates include revised definitions of “Indebtedness” and “Mortgage Assets”, removal of certain business-activity restrictions suspended since September 14, 2021, updated references to the Enterprise Regulatory Capital Framework as amended from time to time, and permission for electronic communications. The amendments do not change capital retention or dividend payments on the senior preferred shares held by Treasury and do not extend Treasury’s warrants, which currently expire on September 7, 2028. Treasury expects the parties may agree in the future to extend the warrant expiration date to avoid a disorderly or disruptive exit from conservatorship.
U.S. Department of the Treasury 2025-01-02
U.S. Department of the Treasury and Federal Housing Finance Agency amend Fannie Mae and Freddie Mac stock purchase agreements to restore Treasury consent rights and add a pre-exit market impact process
The U.S. Treasury and Federal Housing Finance Agency amended the Preferred Stock Purchase Agreements with Fannie Mae and Freddie Mac to support an orderly release from conservatorship. The amendments restore Treasury's consent rights for release and receivership actions and require public input on market impacts before termination. Technical updates include revised definitions and removal of certain business restrictions, while capital retention and dividend payments remain unchanged.