Pulte hints at how Fannie, Freddie may spur builder activity

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Bill Pulte, the head of the oversight agency for Fannie Mae and Freddie Mac, signaled that he will be taking steps to follow up on President Trump's call for them to put a new focus on home construction companies.

One step will involve tracking megabuilders' business, Federal Housing Finance Agency Director Pulte indicated in an X post. Pulte, who also refers to the FHFA as US Federal Housing, and Trump both frequently used social media posts to provide early hints at policy intentions. 

Fannie and Freddie "will be asking relevant market participants to disclose big builder loans they are selling," Pulte said, noting that the move will be made in order "to continue, and to strengthen, the safety and soundness of the market."

Trump's Truth Social messaging suggests he wants the two government-sponsored enterprises to boost builders business while also indicating he holds them responsible for the high price of homes, which he wants to see lowered.

Pulte told Builders Daily that FHFA wants to find ways to "incentivize the right things and disincentivize the wrong things" to that end.

"We're still evaluating the specific measures," he said.

While Freddie and Fannie don't directly build homes themselves, they do buy and securitize loans from builders' lending units and other mortgages that fund new home construction. All of the top 10 builders have lending affiliates of some kind.

Pulte said in yet another X post his examination of Fannie's builder data shows the GSE has bought well over $20 billion in loans from top three players in the space.

Pulte has been watching big builders' growing influence

In another X post, Pulte flagged the growth in large players' influence compared to what he saw during his youth as part of a homebuilding family, He estimated "big builders" have gone from representing 10% of the market at that time to as high as 50-60% currently, with some variation in data sources on that point.

"With great market share comes great responsibility. I encourage all builders to realize this, and sooner rather than later," he said.

The numbers in Pulte's estimate may be on the higher end but are aligned with the trend seen in a recent National Association of Home Builders analysis.

That NAHB analysis of data from Zonda, an information provider that publishes Builder magazine, finds the top 10's share based on closings has increased from around 8.7% in 1989 to 44.7% last year, marking a record high.

DR Horton and Lennar dominate at 13.6% and 11.7%, followed by the FHFA director's namesake PulteGroup at 4.6%. Rounding out the top 10 are: NVR, 3.3%; Meritage, 2.3%; SH Residential Holdings, 2.2%; KB Home, 2.1%; Taylor Morrison, 1.9%; Century Communities and Toll Brothers, both 1.6%.

During his confirmation hearing, the FHFA director said he sold all his stock in PulteGroup "a few months" prior to the event. He also said he severed ties with the company in line with information in financial disclosures and ethics agreements related to taking his position at the agency.

(President Trump also took steps to distance himself from ties he had to Truth Social before taking office, including transferring a $4 billion stake in its parent company to a trust, according to a regulatory filing Politico reported on late last year.)

Tri Pointe Homes exec moves into a key position at Fannie

Pulte indicated in another post that he anticipates one of the newer GSE board members at Freddie with builder ties, Brandon Hamara, will be taking a full-time post at Fannie and playing a role in efforts to further President Trump's aims for home construction.

Hamara, the vice president of land acquisition at Tri Pointe Homes, will move over to a position as senior vice president and head of operations for Fannie's single- and multifamily division with an estimated start date in November, according to a Securities and Exchange Commission filing.

His target compensation is $1.9 million but he must fulfill several conditions to receive it in increments over time, according to Fannie's filing. Hamara has resigned from Freddie Mac's board, a securities filing by that enterprise shows.

How the GSEs could may be able fund more construction

Many concepts that have been floated for builder lending could get new life in the wake of Trump and Pulte's new focus on construction such as a GSE equivalent of a program the US Department of Agriculture has pioneered which allows quicker securitization of one-time close construction loans.

There has been a push in the industry to immediately allow Fannie and Freddie to purchase OTC construction-to-permanent loans, said Sean Faries, CEO of Land Gorilla, a technology provider in the space.

The move would benefit mortgage lenders that currently must hold the construction loans on their warehouse lines of credit until the home gets built, because they would be able to free up credit to extend more financing more quickly.

"When you have a securitizable type of loan program, a mortgage bank doesn't have to tie up all their warehouse capacity for 12 months," Faries said.


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