Federal Housing Finance Agency
FHFA and U.S. Treasury Announce Amendments to the Preferred Stock Purchase Agreements (PSPAs)
January 2, 2025
Summary
FHFA and Treasury amended the PSPAs governing Fannie Mae and Freddie Mac, deleting provisions suspended under the September 2021 Letter Agreement, restoring Treasury's consent right for conservatorship termination, and clarifying that the Enterprises must meet FHFA capital requirements as amended over time. The amendments give the Enterprises more flexibility to support homeownership and rental housing, and a separate side letter establishes a process for public input and market-impact analysis before any conservatorship termination.
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Washington, D.C. – The Federal Housing Finance Agency (FHFA) and the U.S. Department of the Treasury (Treasury) today announced amendments to the Preferred Stock Purchase Agreements (PSPAs). FHFA and Treasury have agreed to delete the provisions of the PSPAs that were suspended pursuant to their September 14, 2021 Letter Agreement and to make other modifications. These changes provide Fannie Mae and Freddie Mac (the Enterprises) with more flexibility to better support access to homeownership and rental housing. In addition, the amendments clarify that the Enterprises must meet the capital requirements established by FHFA as amended over time. The amendments also include technical changes or clarifications applicable to the Enterprises’ financial reporting.
At the time the original PSPAs were executed in September 2008, written Treasury consent was required before the conservatorships could be terminated. Today’s amendments restore that consent right. FHFA and Treasury also agreed that the path to ending the conservatorships should be based on the financial condition of the Enterprises and potential impact of termination on the housing market. Accordingly, FHFA and Treasury have agreed to a process for eventual public input on termination options and potential impacts, which is addressed in a separate side letter between the agencies.
“The Enterprises play a vital role in the national housing finance system,” said FHFA Director Sandra L. Thompson. “Today’s announcement will reassure stakeholders that the Enterprises’ eventual release from conservatorship will follow a methodical process intended to minimize disruption to the housing and financial markets.”
The process set forth in the side letter, which applies to terminations other than receivership and includes seeking public input, briefing the Financial Stability Oversight Council, and analyzing the market impact of different paths to ending the conservatorships before seeking Treasury consent, is intended to facilitate an orderly termination of the conservatorships and to ensure that the impact of the termination on the Enterprises, the housing market, and U.S. financial stability is considered.
Attachment: Letter Agreements
Common questions
- What does "FHFA and U.S. Treasury Announce Amendments to the Preferred Stock Purchase Agreements (PSPAs)" cover?
- FHFA and Treasury amended the PSPAs governing Fannie Mae and Freddie Mac, deleting provisions suspended under the September 2021 Letter Agreement,…
- Which agency issued this update?
- This update was issued by Federal Housing Finance Agency.
- When was it published?
- It was published on January 2, 2025.