As a measure to safeguard continued strength and stability of the mortgage market, the U.S. Treasury Department has decided to terminate several programs related to the Housing and Economic Recovery Act or HERA of 2008, at the end of the year. The Treasury will also amend the terms of its agreements with government-run mortgage-finance firms Fannie Mae (FNM) and Freddie Mac (FRE), to support their ongoing stability.
The HERA programs were established during the economic crisis period, which were intended to support the stability of the housing market as well as to provide relief to struggling homeowners. The Treasury Department is now on the move to terminate some of the programs as it is no longer critical to financial stability.
Accordingly, the Treasury will end on December 31, the program, which was designed to support the mortgage market by purchasing Government-Sponsored Enterprise or GSE-guaranteed mortgage-backed securities or MBS.
Also, the Treasury will terminate on December 31, the short-term credit facility that it established under HERA for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, which was intended to provide a backstop source of liquidity, but was not used.
The Treasury had established Preferred Stock Purchase Agreements or PSPAs, while the Federal Housing Finance Agency or FHFA placed Fannie Mae and Freddie Mac into conservatorship in September 2008. Through the agreement, the Treasury wanted to ensure that each firm maintained a positive net worth.
The PSPAs are now amended to allow the cap on Treasury's funding commitment under these agreements to increase as necessary to accommodate any cumulative reduction in net worth over the next three years, after which the remaining commitment will be fully available to be drawn per the terms of the agreements. According to the Treasury, Fannie Mae and Freddie Mac are not near the $200 billion per institution limit established under the PSPAs. The Treasury is also amending the PSPAs to provide Fannie Mae and Freddie Mac with some additional flexibility to meet the requirement to reduce their portfolios.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.