Rep. Ritchie Torres Warns Trump Admin Its Budget Could Trigger Housing Collapse, Destabilize Fannie Mae and Freddie Mac
Yesterday, Congressman Ritchie Torres (NY-15) wrote to Gene L. Dodaro, Comptroller General of the United States, William J. Pulte, Director of the Federal Housing Finance Agency, and Scott Turner, Secretary of the Department of Housing and Urban Development. The full letter reads (PDF attached):
“I am writing to sound the alarm about an issue that has gotten next to no attention in Washington DC: the Trump Administration has put forward a budget that could destabilize Fannie Mae and Freddie Mac at precisely the moment when President Trump appears intent on releasing both from conservatorship.
“The proposed HUD budget would remove or radically restrict rental assistance for the most vulnerable households, placing hundreds of thousands of New Yorkers—not to mention millions of Americans—at heightened risk of displacement from HUD-assisted housing. These cuts would not only force mass evictions but also trigger prolonged housing court litigation, widespread nonpayment of rent, and a cascade of loan delinquencies throughout the multifamily housing market. The proliferation of multifamily loan defaults would destabilize both the banks that originate the mortgages and the government-sponsored enterprises (GSEs) that securitize and guarantee them. Neither the tenants nor the landlords nor the lenders would emerge unscathed.
“No place would feel the impact of the Trump budget more than my Congressional District, NY-15, which has the highest concentration of Emergency Housing Vouchers (EHVs), a program at risk of extinction. NY-15 has over 2200 EHVs, amounting to 1/4 of the total in New York State. On May 21st, 2025, Donald Trump declared his desire to release the GSEs from their long-standing conservatorship: “I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public…Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right.”
“Even though housing is priority for every American, it has long been an afterthought for the political establishment in Washington DC and it is even danger of disappearing into irrelevance in the age of Donald Trump. HUD has a $70 billion budget, making up a mere 1% of the federal government’s $7 trillion budget. The Trump Administration is proposing not only to cut the 1% in half but also impose time limits on rental assistance for “able-bodied adults”—even families with children. The New York City Housing Authority (NYCHA), the largest provider of affordable housing in America, estimates that the time limits could displace up to 300,000 families in NYCHA’s Section 8 and Section 9 programs. The mass displacement of not only “able-bodied adults” (a favorite target of the Republicans) but also families with children would bring a systemic shock to the financial ecosystem that underpins multi-family housing.
“I urge HUD, FHFA, and GAO to carefully review the Trump budget and the systemic risk it poses to the very GSEs that the Trump Administration plans to release from conservatorship. Instead of setting the stage for success, the Trump Administration is setting up the GSEs for systemic failure.”