How much are the GSEs' retained portfolios growing?

Freddie Mac's retained portfolio inched back up but came nowhere close to catching up with Fannie Mae's, bearing out a 2026 trend that stands in contrast to last year's.

Freddie's retained portfolio was $139 billion at the end of June, up from $137 billion the previous month and $97 billion year earlier. Fannie's retained portfolio totaled $174 billion, up from $172 billion in May and just $85 billion a year ago.

Public officials have pledged to engage in retained portfolio growth through $200 billion in mortgage-backed securities purchases over time to exert downward pressure on rates this year. Lenders have been watching to see how much this offsets inflation exerting upward pressure.

The latest numbers and recent analyst comments suggest Freddie Mac in particular has other considerations that mute the extent it engages in retained portfolio expansion, including whether the assets retained constitute attractive investments.

"We continue to expect Freddie Mac to be opportunistic with its retained portfolio growth," Douglas Harter and Will Nasta, equity researchers at BTIG, wrote in a recent report.

While both Freddie and Fannie grew their portfolios in June relative to the previous month and a year earlier, the amount of their respective holdings remains below highs for the year.

Both Fannie and Freddie's portfolios were on a growth trajectory in 2026 through April when they respectively peaked at $175 billion and $142 billion.

Other considerations

The government-sponsored enterprises make selective choices around what and how much they hold in portfolios for financial and risk management reasons they need to consider in addition to the Trump administration's MBS buying initiative.

Historically-wide duration gaps at the GSEs that measure interest-rate sensitivity widened further in June. Freddie reported its duration gap grew from 14 to 15 months. Fannie recorded an increase from 1.29 to 1.31 years, putting it in a similar 15-16 month range.

Both GSEs have been held in conservatorship since the government bailed them out of a financial crisis in 2008 so public officials have responsibility for managing their risks to taxpayers as well as maximizing their value as a form of support for the housing market.

A recent forecast report from the Congressional Budget Office suggests federal loan and guarantee programs broadly tend to pose some risks related to market value fluctuations even if they offer savings from more of a budget perspective.

The GSEs lie outside the standard federal budget process but CBO measures also are considered more broadly in policy.

Both Fannie and Freddie's earnings proved surprisingly strong in the second quarter despite higher rates and some concerns that they would dampen the spring homebuying season.

The two have been competing fiercely to buy new home mortgages from lenders, with Freddie giving Fannie more of a run for its money in this area recently even though the latter historically has been the influential player.

However, Fannie did manage to beat Freddie in single-family loan acquisition volume in the second quarter with $111 billion in mortgage purchases as opposed to $110 billion.

Freddie's single-family acquisitions had run ahead of Fannie's the previous quarter, when the former bought $103 billion in loans, and the latter purchased $98.7 billion. 

Trump administration officials showed interest in selling some more of Fannie and Freddie's shares to the public last year, but officials later shifted more focus to the portfolio initiative.