Resolving the Contested Future of the GSEs: The Stakes Are High
Name
Resolving the Contested Future of the GSEs The Stakes Are High.pdf
Size
1.29 MB
Format
Adobe PDF
Checksum (MD5)
b80d5933239766555fb6eed8cc14e5ba
Author(s)
Golding, Edward
Wachter, Susan
Date Issued
November 17, 2025
Journal
Housing Policy Debate
Publisher
Taylor & Francis
Citation
Golding, E., & Wachter, S. (2025). Resolving the Contested Future of the GSEs: The Stakes Are High. Housing Policy Debate, 1–14.
Version
Final published version
Abstract
Seventeen years after entering conservatorship, Fannie Mae and Freddie Mac remain central to the future of U.S. housing finance. This paper evaluates the feasibility of their exit from conservatorship without Congressional action, assessing repayment of the federal bailout, capital adequacy under current regulatory frameworks, and the durability of structural reforms. It puts forth a utility model that preserves liquidity, affordability, and mission alignment while mitigating risks of increased mortgage costs. Treasury mechanisms—including commitment fees and stock warrant monetization—are examined as tools to support affordable housing and fulfill charter mandates. A carefully structured exit, supported by robust oversight and capital standards, can balance adequate financial returns with public purpose. A regulatory framework that maintains stable lending standards and pricing over the business cycle is essential to reducing investor-required returns and enhancing affordability, thereby resolving the contested future of the GSEs.
MIT Department
Sloan School of Management
Massachusetts Institute of Technology. Center for Real Estate
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivatives
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1080/10511482.2025.2570726
