A provocative new concept is being analyzed by policy makers and think tankers to bring solutions to unlock the current frozen residential real estate market ($55 Trillion)

Fannie Mae and Freddie Mac (currently under conservatorship of the US Treasury) are exploring portable and assumable mortgages. In concept, this policy change could deliver previous low-rate loans to move through the system by letting today’s existing cheap financing survive a home sale or move, instead of being paid off and replaced with a new, higher‑rate loan. Assumable mortgages would allow a qualified buyer to step into the seller’s existing fixed‑rate mortgage (same rate and remaining balance), while portable mortgages would let the current borrower carry their mortgage to a new property, a structure more common in countries like Canada. This is being discussed as a way to “unfreeze” a market where many owners are locked in at very low rates and reluctant to sell because they would have to give up their cheap financing.

The main why is affordability and mobility: if a new buyer can assume a 3% loan when market rates are 6%, their monthly payment can fall by several hundred dollars, potentially saving well over 200,000 dollars over the life of a typical 30‑year mortgage, and similar math applies if a family can port its low-rate mortgage when moving. This could unlock inventory by making it easier for existing owners to move up, move down, or relocate without suffering a payment shock, while giving first-time or move‑up buyers access to below‑market rates that are otherwise unavailable. It also fits into a broader policy agenda of easing the affordability crisis through financing innovation rather than only through subsidies or large new spending programs.

The effects would be mixed.

On the positive side, more assumable and portable options could: improve affordability for qualifying buyers, increase transaction volumes and housing mobility, and help servicers keep loans on their books instead of seeing them paid off, which some servicing firms actually prefer.

On the negative side, they could lock investors into low‑yield assets for longer, compress lender and servicer margins, add operational complexity (especially for portability, which requires tracking the same loan across properties). There is also a risk that sellers in tight markets simply “price in” the value of a low-rate assumable mortgage, so the rate benefit gets partially captured in a higher sale price rather than flowing fully to the buyer.

What would have to be installed by the housing finance system to accommodate? Not simple, but doable in the age of AI…

-Mark certain loans as assumable or portable from day one, with clear rules for how they can be used.

-Build simple playbooks so originators know exactly how to approve a buyer taking over or porting a loan.

-Treat assumptions and ports as special “events” in the system, not brand‑new loans.

-Let servicers swap in a new borrower on the same loan after full underwriting and verification.

-For portability, let the same loan move to a new property while keeping the rate, term, and history.

-Update escrow, taxes, and insurance whenever the borrower or property changes.

-Upgrade tech systems so “borrower” and “property” can change without breaking the loan record.

-Connect systems to investors and guarantors so they are automatically notified when a loan is assumed or ported.

-Add compliance tools to generate correct disclosures, approvals, and audit trails.

-Start with small pilots to manage operational risk, staff training, and model updates before going big.

Many of these system changes to facilitate modifications were implemented after the 2008 Great Recession. Where there is a will…