Billionaire investor Bill Ackman has formally submitted to the White House and Treasury Department a plan aimed squarely at lowering mortgage rates by encouraging Fannie Mae (FNMA) to adopt prepayment penalties on conforming loans. Under Ackman’s proposal, homebuyers who refinance or pay off their mortgages early would incur a fee equal to 1% of the outstanding balance if prepayment occurs within the first five years. Ackman estimates this mechanism would shave roughly 25 basis points off prevailing 30-year mortgage rates, potentially reducing average borrower payments by $50 per month on a $300,000 loan. His analysis projects that by narrowing the duration risk on FNMA’s guarantee portfolio, the agency could save approximately $8 billion in hedging and funding costs annually, enhancing net spread income and strengthening its capital buffer against credit losses.

On January 10, Treasury Secretary Scott Bessent announced authorization for Fannie Mae to deploy up to $200 billion in direct purchases of agency mortgage bonds over the next 12 months. This capital infusion is designed to pull down yields on Freddie Mac and Fannie Mae-guaranteed securities across the curve, with the stated goal of reducing conventional mortgage rates by an estimated 30 to 40 basis points. According to Treasury projections, each $50 billion tranche of bond buying could lower 30-year rates by roughly 6 basis points, translating into potential annual borrowing savings exceeding $10 billion for U.S. homeowners. The intervention follows data showing FNMA’s mortgage portfolio grew by 7% year-over-year in December, signaling rising demand for home financing that policymakers aim to sustain through increased secondary market support.