Since assuming oversight of the nation’s housing finance system, Bill Pulte has promised better access to homeownership, garnering headlines with far-fetched ideas like a 50-year mortgage. His boss, President Trump, has said he would bar Wall Street from buying single family homes and buy $200 billion in mortgage bonds in a bid to ease lending.
But the regulator Mr. Pulte leads, the Federal Housing Finance Agency, has also been making changes that could make it harder to buy homes. It has been repealing rules and guidance, firing teams of people focused on fair lending and climate risk, and reducing its focus on low-income borrowers.
The actions, taken as a whole, will raise costs for people who can least afford to pay, according to advocates for affordable homeownership.
“Every single action seems small, but it’s a brick that’s being removed from a wall, and it starts to crumble who can still get a mortgage,” said Sharon Cornelissen, director of housing for the Consumer Federation of America. “There’s such a stated commitment to tackling our housing crisis, so it’s ironic that a lot of these actions do the opposite.”
The agency was established in 2008 to act as the conservator for Fannie Mae and Freddie Mac — known as “government-sponsored enterprises” — after they foundered under the weight of bad mortgages during the financial crisis. With tighter oversight of both their affordable housing goals and their financial stability, the enterprises built up teams of people who worked to keep credit widely accessible while preventing another collapse.
Mr. Pulte, a grandson of one of the nation’s largest home builders, arrived at the F.H.F.A. on March 14 and set to work dismissing people, starting with more than half of Fannie’s and Freddie’s board members. Other top officials were summarily fired, including Freddie’s chief executive. As Mr. Pulte sought to cut back functions not explicitly required by statute, the layoffs soon spread further down the ranks.
Scott Susin was an economist at an F.H.F.A. office that monitored disparities in interest rates and home appraisals, and reported them to banking regulators. His whole division, which oversaw fair lending and consumer protection, was cut.
“Our supervisor made a short speech thanking us. They said, ‘You have a couple minutes to take anything you want out of your office, and we’ll mail the rest,’” Mr. Susin said.
The F.H.F.A., Freddie Mac and Fannie Mae declined to comment.
Later in March, Fannie fired a majority of the team that analyzed how climate change posed risks to the company’s mortgage portfolio, including the availability of insurance, and monitored compliance with greenhouse gas regulations. Those who weren’t cut were reassigned to other jobs.
One person on that team said she had been shocked to see Mr. Pulte say on Fox News that a member of the climate staff had thanked him for being fired, because his job wasn’t necessary. Everyone she worked with, she said, was passionate about what they did. Like several people interviewed for this article, she requested anonymity because she feared retaliation from her former employer.
In April, Fannie fired about half of an approximately 40-person team focused on sustainability, social responsibility and mortgage access for underserved groups. Its members worked on projects such as packaging bonds that would appeal to socially conscious investors, bringing in additional capital. A similar group at Freddie was also disbanded.
Starting in May, members of an approximately 70-person group at Freddie that worked to advance the company’s affordability mission were either dismissed or reassigned. The team supported housing counseling organizations, tracked data on how many mortgages were being made to what types of buyers and trained lenders on products tailored to people with low incomes.
“There have been pretty large cuts, and in some cases the elimination of whole teams of the people related to fair lending, emerging markets and some of the more mission-related work streams,” said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition. “So I certainly think you can take from that a shift in focus.”
Personnel, Then Policy
Mr. Pulte accompanied the firings with rollbacks of guidance and rules that some of those jobs existed to enforce, mirroring actions by the Department of Housing and Urban Development.
In March, he rescinded two advisory bulletins on incorporating the effects of climate change into risk management, which had been adopted to protect Fannie and Freddie against serious losses from natural disasters.
Also that month, Mr. Pulte said the enterprises would no longer purchase loans made through special purpose credit programs, which allow lenders to reach disadvantaged demographics without running afoul of federal fair lending laws. The Biden administration had encouraged their use, and in response, banks began offering down payment assistance and small-business loans in majority Black and Hispanic areas.
Two of the largest banks, JPMorgan Chase and Wells Fargo, would not say whether those programs remained in place. Thomas Callahan, executive director of the Massachusetts-based Partnership for Financial Equity, said the edict had a “chilling effect.”
“Every bank we’ve talked to is at a minimum re-examining whether they want to continue,” Mr. Callahan said. “They’re concerned about the regulators going in and making an example of a bank that might be doing this.”
Mr. Pulte also rescinded a suite of fair lending guidance documents in April. In July, the agency proposed scratching a year-old rule that, among other things, had empowered it to enforce financial penalties against Fannie and Freddie for violating fair lending and consumer protection laws.
James Wylie, who was fired as the F.H.F.A.’s deputy director for public interest investigations in the spring, wrote in September that repealing the rule “raises constitutional concerns about agency abdication of responsibility combined with the use of agency authority to insulate regulated entities from accountability.”
And in December, the agency reset its affordable housing goals, short-circuiting what is typically a three-year cycle; the Biden administration had issued the latest version in 2024. The new benchmarks, which represent the share of Fannie’s and Freddie’s purchases of loans to lower-income buyers, are weaker than they have ever been.
In its justification, the F.H.F.A. cited anecdotal concerns that, because loans to lower-income buyers are less profitable, an excessive focus on that demographic could weaken the companies’ ability to support middle-class buyers.
Sarah Edelman, executive vice president of policy and programs at the National Community Stabilization Trust, does not see evidence of such a trade-off.
“When we’re talking about low income as defined by the affordable housing goals, we are talking about teachers, firefighters, frontline workers, who earn below 80 percent of the area median income,” she said.
Although some banking trade associations supported the change, lenders focused on the lower end of the market spoke out against it. Credit unions, for example, typically focus on disadvantaged communities and first-time home buyers. They would have a more difficult time originating affordable mortgages if Fannie and Freddie weren’t buying as many.
“When you lower those goals, you put less demand out there for lower-income loans. Where do credit unions fit in that?” said Greg Mesack, senior vice president for advocacy at America’s Credit Unions. “Will there be as much of a market for loans we want to sell?”
An Uncertain Future
Pulling away from lower-income home buyers could boost profits, putting Freddie and Fannie in a better position for a public share offering, which investors have pushed for since the federal government took them over. Mr. Trump and Mr. Pulte have repeatedly teased the idea, saying in May that they were “giving very serious consideration” to a stock sale.
“We are focused on running them like a business and taking out costs, so I don’t think there’s any limit to what they could be worth one day,” Mr. Pulte said in an October post on X.
But Mr. Pulte’s focus on the bottom line has unsettled some staff members. Sam Valverde ran an office at Freddie Mac devoted to achieving the affordable housing goals until he was fired in November. He thinks the two companies need to prioritize people who might not otherwise be able to buy a home.
“They were created by Congress,” Mr. Valverde said. “They were given this special limited purpose, which included potentially earning less in order to serve lower-income borrowers. This sets them apart from truly private-sector entities.”
Not all forces are eroding affordability. Mortgage costs have come down, as the Federal Reserve has eased its benchmark rate. Rents are falling, as a flood of new apartment buildings that started construction a few years ago have come onto the market. The agency also doubled the amount of money it could invest in tax credits for low-income housing.
But the mood at the F.H.F.A., Fannie and Freddie is chilly, according to employees who remain there and requested anonymity because they have been told not to speak to reporters. The boards meet less frequently. Pink slips keep coming.
In late October, Mr. Pulte pushed out Fannie Mae’s chief executive, its general counsel, the head of its single-family business, and the ethics and investigations team after they raised concerns about the sharing of confidential pricing information and mortgage records, which Mr. Pulte used to accuse Mr. Trump’s political opponents, including the Federal Reserve governor Lisa D. Cook, of fraud.
That round of firings, as well as some of Mr. Pulte’s proposals — such as the 50-year mortgage, which would raise the risk of default, and Mr. Trump’s recent directive to buy $200 billion in mortgage bonds — have troubled current and former employees. Mr. Susin, the former F.H.F.A. economist, who has since started a mortgage-focused think tank, sees echoes of the financial crisis that forced Fannie and Freddie into conservatorship.
“They went beyond their core mandate and started doing risky things, and proved not to be sufficiently capitalized, and that’s the way they could be heading,” Mr. Susin said. “None of it seems that well thought out to me.”
Lydia DePillis reports on the American economy for The Times. She has been a journalist since 2009, and can be reached at [email protected].
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