President Trump’s federal housing director Bill Pulte says officials are examining claims that Fannie Mae and Freddie Mac participate in home-financing arrangements marketed as compliant with Islamic law.
Pulte, who serves as both FHFA Director and chairman of the boards of the two government-sponsored mortgage giants, responded directly on X after White House correspondent Natalie Winters highlighted the issue.
Winters posted evidence that Fannie Mae maintains a specific loan code for “Musharaka Islamic Finance Mortgages” and that Freddie Mac explicitly recognizes financing “designed to comply with Islamic law.”
Pulte replied: “We are looking into this right now. Thanks for mentioning!”
Fannie Mae and Freddie Mac, which together back nearly half of all U.S. residential mortgages and remain under federal conservatorship, have for years provided critical secondary-market liquidity to Sharia-compliant products. These are structured primarily as diminishing Musharaka (co-ownership) arrangements rather than traditional interest-bearing loans, because Islamic law forbids riba (interest).
Providers such as Guidance Residential have financed more than $10 billion for tens of thousands of families using these structures, with the GSEs stepping in as co-owners or investors to keep the pipeline flowing. The practice dates back to the early 2000s, when Fannie and Freddie first began purchasing Islamic mortgage products.
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