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Freddie Mac’s CFO Just Resigned, Will Freddie Change Direction?

by California Digital News

As of June 28, Freddie Mac CFO Christian Lown will resign from the government-sponsored enterprise (GSE) mortgage provider to join CoStar, the behemoth real estate listing and data and analytics company valued at around $30 billion

Usually, when someone leaves a government job for the private sector, there’s a tacit understanding that the new position comes with less public scrutiny and more—much more—money. There’s little reason to doubt that is the case here.

Considering Lown oversaw spectacular growth at Freddie Mac and spearheaded the company’s recently proposed home equity cash-out refi program, which allows homeowners to keep the low rate of their current loan while taking out a second, it seems odd that Lown should leave so abruptly, especially when things were seemingly going so well. In last month’s first-quarter 2024 report, Lown cited some impressive numbers for Freddie Mac, guiding the GSE to $2.8 billion in net income, an increase of $771 million, or 39% year over year.

What Freddie Mac’s Home Equity Proposal Could Mean for Investors

Freddie Mac’s low-rate home equity proposal has its critics, who feel it could lead to another financial crash. However, others are celebrating Lown’s innovative thinking in releasing a possible stimulus of $3 trillion into the housing market without federal spending. 

Meredith Whitney, CEO of Meredith Whitney Advisory Group and one-time “Oracle of Wall Street” who predicted the Great Financial Crisis, stated in a column for the Financial Times:

“This was a smart move by Freddie, and the FHFA [Federal Housing Finance Agency] will do a lot of good by approving it. Despite the more than $32 trillion in equity on homeowner balance sheets, very little of it has been tapped through home equity loans.”

Whitney went on to state the case for the low-interest home equity option:

“Most people in the U.S. are feeling the sting of persistent inflation, but older Americans living on a fixed income have been hit particularly hard. Insurance costs for homeowners have risen well over 11% over three years, while they are paying more tax. U.S. property tax revenues have risen 26% over the past three years.”

For real estate investors, the opportunities are obvious—the chance to borrow against their homes to fix and flip, BRRRR, or invest in long-term rentals without worrying about using hard money or paying market interest rates. However, not everyone will be able to benefit from the proposed program. 

Whitney explained: 

“Freddie will only buy the second mortgages of borrowers that it already has a first mortgage with, and the combined loan-to-value of both the first and the second mortgage cannot exceed 80% of the value of the property. The current loan-to-value of Freddie’s mortgage portfolio is 52%. Thus, we estimate Freddie could unlock $980 billion in equity for homeowners.”

Leaving Before an Election

With an innovative product, if passed, likely to change the landscape of the residential and single/small multifamily market, it’s odd that Lown would choose not to see it through and take his lap of honor. However, timing could be something to do with it. 

During the Trump administration, the former president unveiled ambitious plans to completely overhaul Freddie Mac and Fannie Mae, returning it to the private sector. It had been in government conservatorship since nearly collapsing during the financial crash of 2008. Although that plan was eventually abandoned during the pandemic, with the outcome of the next election by no means a certainty, it could be a prescient move on Lown’s part. There has been considerable investor optimism that a Trump win could again see Freddie and Fannie returned to the private sector. 

“While we believe the challenging logistics associated with privatizing the GSEs make the likelihood of privatization relatively low, history suggests that the market believes a Trump administration could potentially accomplish GSE privatization,” Keefe, Bruyette & Woods analyst Bose George wrote in a note after Trump’s Iowa primary win. “Even if there is a change in the White House and GSE recapitalization efforts resume, we see limited longer-term value in the common shares.”

The Lure of CoStar

Politics aside, the lure of CoStar cannot be overlooked

Lown’s appointment followed the retirement of previous CFO Scott Wheeler. In CoStar, Lown has joined a real estate rocket ship. According to recent data, the Virginia-based company’s revenue, as of April 2024, was $656 million, up 12% year over year, and the company is holding cash and cash equivalents of $4.95 billion. It registered gross profits of $515 million in the first quarter of 2023. 

The last 12 months have seen CoStar undergo radical growth and expansion. Its residential real estate site,, saw a 600% surge in traffic in Q4, making it the fastest-growing real estate website in the U.S. Another of its sites,, became CoStar’s first billion-dollar revenue run-rate business. The company also owns 

CoStar’s overall revenue for 2024 is projected to range from $2.75 billion to $2.77 billion. The company recently agreed to purchase the digital twin/spatial data site Matterport, which allows viewers to take realistic virtual tours of buildings, for $1.6 billion.

In joining the company, Lown has the opportunity to expand all its websites, grow its global presence, and increase revenue through a myriad of possibilities, including social media, subscriptions, and advertising.

Final Thoughts

Given a government-associated organization’s scrutiny and current political uncertainty in the U.S., Lown’s move away from Freddie Mac after a highly successful tenure is entirely understandable. Reporting directly to CoStar founder and CEO Andy Florance, he has the opportunity to apply years of high-level financial successes to the challenges of further growing a real estate tech company that had morphed from being a commercial real estate resource to a very public-facing website, with two of the largest residential platforms in the country, taking on competitors like Zillow and 

As for Freddie Mac, despite a new innovative product and a healthy bank balance, with an election looming, its future appears as uncertain as the housing market it serves.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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