Fannie Mae and Freddie Mac are on the path to exit
conservatorship, a step that could come as soon as 2022.

Fannie and Freddie were taken into conservatorship in
September 2008, with the government providing each of the GSEs with hundreds of
billions of dollars in financial support in order for the companies to survive
the housing crisis.

But now Federal
Housing Finance Agency Director Mark Calabria is actively preparing the
GSEs to exit conservatorship. Now that could come as soon as 2022 or even 2021.

At a housing policy conference in Washington Wednesday,
Calabria said he expects the FHFA will have a rule dictating capital
requirements in place before Fannie and Freddie can go to market. One option
the FHFA is considering is a period where the GSEs technically exit
conservatorship but aren’t completely free of government oversight.

“If all goes well, 2021, 2022 we will see very large public
offerings from these companies,” Calabria said. “The consent decree will be
able to give that window where they can go to market, do an offering and still
operate under a way where we’ve got some prudential safeguards.”

Fannie and Freddie could be looking at exiting government
control by 2022 or 2023, according to Calabria.

The FHFA recently announced that it would allow the GSEs to retain $45 billion in combined capital, further setting the stage for them to exit conservatorship.

Calabria has acknowledged that fully removing the GSEs from
conservatorship can’t be done without Congressional action, but given the
difficulty of getting that done quickly, the Trump administration is taking
action to put the GSEs on the path to being private companies again.

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