HUD Chief Targets Fannie, Freddie Privatization and Agency Overhaul

New HUD chief Scott Turner is focused on privatizing Fannie Mae and Freddie Mac, cutting costs, and exploring a rebrand.

Jordan B. & Han-Gwon Lung
February 07, 2025

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Good morning. Scott Turner is officially at the helm of HUD, and he’s wasting no time—pushing to privatize Fannie and Freddie, slash inefficiencies, and even rebrand the agency. Big moves, big risks. Let’s dive in.

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Regulation & Housing

HUD Chief Targets Fannie, Freddie Privatization, Cost-Cutting, And Re-Branding

Scott Turner, a former NFL player and Texas lawmaker, has been confirmed as HUD Secretary, vowing to overhaul the agency amid a worsening housing crisis.

Privatization push: Turner sees himself as a "quarterback" in the effort to privatize Fannie Mae (FNMA) and Freddie Mac (FMCC), working alongside the Treasury Department, Congress, and the FHFA. These mortgage giants back $7.5 trillion in U.S. home loans, and their privatization could dramatically reshape the housing finance system.

The plan and the risks: Trump’s team values the privatized entities at over $330 billion, with the government’s 80% stake potentially converting to $250 billion in common shares. While proponents see a windfall, critics warn that if mishandled, privatization could push mortgage rates higher by discouraging investors in mortgage-backed securities.

Cutting costs: Beyond privatization, Turner is spearheading a full-scale HUD review to root out inefficiencies in its $60 billion budget. His agenda includes rolling back DEI programs, revising return-to-office policies, and reducing federal housing regulations—all in line with Trump’s broader push to shrink government oversight. He’s also urging states to relax zoning laws to help lower housing costs.

More housing: To increase supply, Turner is backing more development on federal land, including rural, urban, and tribal areas. He plans a nationwide tour to assess viable sites, aligning with Trump’s push to cut red tape and boost housing construction.

A HUD rebrand? Turner believes HUD’s current name doesn’t fully reflect its evolving mission—particularly in rural and tribal housing. A name change is under consideration, though it would require congressional approval and a lengthy political process.

➥ THE TAKEAWAY

The big picture: Turner is positioning himself as a reformer but faces tough choices—balancing cost-cutting with the urgent need for more affordable housing. His push to deregulate housing markets could boost supply, but without clear funding commitments, the impact remains uncertain.

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✍️ Editor’s Picks

Tariffs impact costs: Wisconsin homebuilder David Belman warns that Trump's proposed tariffs could add $29K to new home prices, with Canadian softwood and Mexican gypsum costs rising sharply.
Trump eyeing yields: Treasury Secretary Scott Bessent says Trump is prioritizing keeping 10-year Treasury yields low over pressuring the Fed to cut rates, focusing instead on fiscal policy.
Acquisition-driven growth: Colliers reported $4.8B in 2024 revenue, up 11% YoY, fueled by capital markets and engineering acquisitions, despite missing EPS targets and stock trading down 9%.
Jobless claims rise: US initial jobless claims rose to 219K last week but remain near pre-COVID levels, signaling a stable labor market despite recent layoff announcements.
Trade deficit record: The US trade deficit in goods reached a record $1.2T in 2024 as imports surged, fueled by a strong dollar and rising consumer demand.

🏘️ MULTIFAMILY

Strong headwinds: Rising interest rates, 500K new units, and refinancing challenges are expected to slow multifamily deals in 2025, though distressed asset opportunities may emerge.
Manage Smarter in 2025: Find the best multifamily property management software to help you streamline operations and simplify leasing and maintenance with ease.
Office conversions: TF Cornerstone and Dune Real Estate Partners are deploying a $1B fund to convert distressed office buildings into apartments, with 20–25 projects planned nationwide.
Multifamily refi: ARC Multifamily Group secured a $67M refinancing for The Blakely, a 420-unit Atlanta-area property, with CBRE providing a $58M Fannie Mae loan and Pensam adding $9M.
Filing bankruptcy: Celal Ozkan’s Sky Gardens filed for Chapter 11 amid a $7.7M foreclosure dispute with Safe Harbor Equity over an unbuilt 341-unit apartment tower.
Changing hands: Boston-based DSF Group acquired the 678-unit Town Square at Mark Center in Alexandria, VA, using $166M in financing from M&T Realty Capital.

🏭 Industrial

AI investment: Google parent Alphabet (GOOGL) will invest $75B in 2025, focusing on AI infrastructure, data centers, and servers, outpacing Wall Street’s $58B projection.
DFW stays strong: Despite rising vacancies, DFW's industrial vacancy rate held steady at 9.54%, fueling new developments and major deals, including a 387 KSF project by Alliance Industrial.

🏬 RETAIL

Going from B to A: Simon Property Group (SPG) is investing $400M–$500M to modernize second-tier malls by adding healthcare, entertainment, and mixed-use elements to boost rents.
Back in the bin: Struggling since its 2020 buyout, Forever 21 is exploring restructuring options, including Chapter 11, as it faces fierce competition from online retailers like Shein and Temu.
Closures rise: High rents, office vacancies, and parking challenges are forcing casual eateries to close in Atlanta’s West Midtown, while fine dining destinations continue to thrive.

🏢 OFFICE

Postpandemic high: US office occupancy reached 54.2% of pre-COVID levels, with Houston (65%) and Austin (61%) leading as return-to-office policies gain traction.
Technology leases: DXC Technology Services signed a lease for the entire 35th floor at Carnegie Hall Tower, securing 11 KSF at 152 West 57th Street.

🏨 HOSPITALITY

On the slopes: As demand for skiing grows, resort owners like Great Gulf and Alterra Mountain Co. are planning multi-billion-dollar mixed-use projects, despite environmental and regulatory hurdles.
Planned supertall: Mint Developers and Sonesta are launching The James Hotel & Residences, an 82-story, 1K-ft condo-hotel in Downtown Miami, set to break ground in 2026.

📈 CHART OF THE DAY

Delinquency rates for commercial property mortgages increased in Q4, according to the MBA Research latest Commercial Real Estate Finance Loan Performance Survey.