(John Bazemore/AP)

The Trump administration’s vast plan for remaking the housing market could leave future home buyers, particularly those who are lower-income, with fewer options and resources, according to housing advocates.

The housing plans released Thursday by the Treasury and Housing and Urban Development departments envision a smaller role for the government in the housing market while taking swipes at current programs aimed at affordable housing.

President Trump’s proposals raise “serious concerns about the future of housing in this country, particularly affordable housing,” said Rep. Maxine Waters (D-Calif.), chairman of the powerful House Financial Services Committee.

The Trump administration is also making a once-unthinkable concession in its proposal: Fannie Mae and Freddie Mac are here to stay.

The housing giants have lingered under government control for more than a decade after receiving more than $100 billion in taxpayer bailouts to shore up the housing market. Lawmakers squabbled for years about their fates, with Republicans repeatedly calling for Fannie Mae and Freddie Mac to be abolished.

In a 2018 editorial in the Wall Street Journal, then-Rep. Jeb Hensarling (R-Tex.), chairman of the Financial Services Committee at the time, called for the companies, which back half the country’s housing market, to be replaced. “The new system we envision would be based on private capital, competition, innovation, consumer choice and market discipline," he said.

Instead, the Treasury Department unveiled a sweeping plan this week that recommends returning the massive companies to private hands.

“Both in the Obama administration and during periods of bipartisan negotiations the focus was on whiteboarding a totally new system," said David M. Dworkin, who was a senior adviser in the Treasury Department on housing finance during the Obama and Trump administrations. “It is too hard. The current system is too embedded and the unintended consequences are too unpredictable.”

Here’s what you need to know about the housing reports submitted Thursday by the Treasury Department and the Department of Housing and Urban Development and how it could affect you.

How could the administration’s proposals affect consumers?

The Trump administration says its proposals aim to protect the availability of the 30-year mortgage and support affordable housing throughout the country. But housing advocates warn that some proposals could raise mortgage rates and make it harder for some people to obtain a mortgage.

The plan, for example, calls for eliminating Fannie Mae and Freddie Mac’s affordable housing goals and replacing them with a fee paid to the Department of Housing and Urban Development. The goals “should be replaced with a more efficient, transparent, and accountable mechanism for delivering tailored support,” the Treasury Department’s report says.

But fees paid by the companies would inevitably be absorbed into HUD’s budget rather than going directly to help low-income borrowers, said Dworkin, chief executive of the National Housing Conference. “The net result would be zero. In fact, it would be less than zero, because it would make the housing affordability crisis the report acknowledges even worse,” he said.

What areas of the country are most likely to be affected?

While the proposals generally deal with the national housing market, some could affect people in cities that have rent-control laws in place. According to the Urban Institute, there are 183 municipalities with some form of rent control, with nearly all in New Jersey and New York. (Cities in Maryland and California, as well as the District, also have rent control.)

The report questions whether Fannie Mae and Freddie Mac should be backing loans in jurisdictions with rent-control laws. The administration urges the Federal Housing Finance Agency (FHFA), the regulator for Fannie Mae and Freddie Mac, to “revisit … underwriting criteria” for loans on multifamily properties where rent-control laws “or other undue impediments to housing development” are in place.

The report indicates those actions could be done administratively, meaning approval from Congress wouldn’t be needed.

That is another non-starter, Dworkin said. “How on earth do conservatives accept government making entire parts of the economy unavailable to cities that do things they don’t like?” he said. “The entire city of New York would not be able to use Fannie Mae and Freddie Mac financing for anything. It’s never going to happen.”

Why is this proposal happening now?

This week marks the 11th anniversary of the government seizing control of Fannie Mae and Freddie Mac, as the housing market unraveled and the firms’ losses piled up.

Both companies play a critical part in the housing market, buying mortgages from lenders, then packaging them into securities to sell to investors. They back more than half the country’s mortgages, providing key market support.

Republicans and Democrats have long agreed that the companies shouldn’t be kept in government conservatorship indefinitely but have struggled to come up with a solution, fearful that a wrong move could disrupt the housing market and the availability of 30-year mortgages.

One major difference now, industry and housing advocates say, is Treasury Secretary Steven Mnuchin. In addition to being a former Goldman Sachs banker, Mnuchin also used to run a regional bank and is familiar with the mortgage market. In 2009, Mnuchin led the purchase of failed subprime mortgage lender IndyMac, the California bank whose long lines of customers waiting to withdraw their money became an enduring image of the financial crisis.

“Mnuchin understands mortgage markets and wants his legacy to include a role in ending the [Fannie Mae, Freddie Mac] purgatory of the past decade,” Charles Gabriel, an analyst with Washington-based research firm Capital Alpha Partners, said in a research note.

How likely is this to pass Congress?

Many of the 49 proposals could be accomplished through administrative action by federal agencies while others need approval from Congress.

Republicans praised the reports as a road map to completing a complicated task that, they note, the Obama administration failed to do.

“Eleven years after being bailed out and put into conservatorship, it is time to make the hard decisions and strengthen our housing finance system,” said Sen. Mike Crapo (R-Idaho), chairman of the Senate Banking Committee.

Crapo unveiled a proposal that mirrors many of the Trump administration’s proposals for Fannie Mae and Freddie Mac earlier this year and has scheduled a hearing next week that will include Mnuchin, Mark Calabria, the head of FHFA, and HUD Secretary Ben Carson.

But there are several potential speed bumps to passing such significant legislation anytime soon. Democrats in the House are unlikely to consider legislation that might alter Fannie Mae and Freddie Mac’s affordable housing goals, for example. And lawmakers may not want to wade into such politically fraught waters so close to the next election.

“There is simply no viable window for comprehensive mortgage finance reform legislation in this Congress,” Isaac Boltansky, director of policy research at Compass Point Research & Trading, said in a research note.

What happens if Congress can’t reach a deal?

Trump’s proposals include several measures that could be tackled without Congress.

Even if Congress fails to act, Calabria has significant leeway to start the process of releasing Fannie Mae and Freddie Mac from government control, potentially putting pressure on reluctant lawmakers.

Calabria, for example, could start by allowing Fannie and Freddie to retain more capital in preparation for becoming viable private companies again. He could also, as the Trump administration recommends, end the practice of the Treasury Department collecting most of the companies’ profits.

Over the past decade, Fannie Mae has received $119.8 billion in taxpayer bailouts, with Freddie Mac receiving $71.6 billion. But as they returned to profitability, the companies have sent a combined $300 billion in dividends to the Treasury Department.

What about Fannie Mae and Freddie Mac’s shareholders?

Despite being in government conservatorship, Fannie Mae and Freddie Mac’s stocks still trade on public markets — at a fraction of their previous value.

These shareholders remain in limbo under the Trump plan but retain some hope for a big payoff. If the companies are released from government control, their stock price could jump, allowing some investors to potentially lock in profits.

For Fannie Mae and Freddie Mac investors, “the outlook seems confirmingly positive, albeit with uncertainty for timetable and crucial tumblers’ falling into place,” said Gabriel, of Capital Alpha Partners.

Among those watching the issue most closely are the hedge funds and other investors who have spent years lobbying the White House and Capitol Hill to rescind the companies’ government conservatorship. In particular, Wall Street has been vexed that both companies send their profits to the Treasury rather than sharing them with shareholders.

“There is a hope that since the government got so much back that they will recapitalize Fannie and Freddie and allow the shareholders to receive what they deserve and what every other shareholder in every other financial enterprise has received,” hedge fund billionaire John Paulson said in a rare interview with the “According to Sources” podcast in January.

Shareholders in Fannie Mae and Freddie Mac, himself included, have not received a dividend in 10 years, said Paulson, best known for making a $15 billion bet against the housing market and is among Trump’s biggest supporters on Wall Street. “Shareholders have been absolutely destroyed,” he said.