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Freddie Mac's CFO Steps Down: What's Next for the Company?

As of June 28, Freddie Mac's CFO Christian Lown will step down from his position at the government-sponsored enterprise (GSE) mortgage provider to join CoStar, the colossal real estate listing and data analytics company valued at approximately $30 billion.


Typically, when transitioning from a government role to the private sector, it's generally understood that the new job offers less public scrutiny and significantly higher financial rewards. It’s reasonable to assume this is the case in Lown’s move.


Given Lown's oversight of Freddie Mac's impressive growth and his leadership in proposing the home equity cash-out refinance program, which allows homeowners to retain their current loan's low rate while taking out a second mortgage, it's surprising that Lown would depart so abruptly, especially during a period of apparent success. In the first-quarter 2024 report released last month, Lown highlighted Freddie Mac's impressive performance, guiding the GSE to achieve $2.8 billion in net income, a 39% increase year over year.


Implications of Freddie Mac’s Home Equity Proposal for Investors

Freddie Mac’s proposal for low-rate home equity has faced criticism from some who fear it could trigger another financial crisis. However, others applaud Lown's innovative approach, seeing it as a potential means to inject $3 trillion into the housing market without federal expenditure.


Meredith Whitney, CEO of Meredith Whitney Advisory Group and a renowned financial analyst, praised Freddie's move in a Financial Times column:


“Freddie's initiative is a savvy move, and approval by the FHFA [Federal Housing Finance Agency] could yield significant benefits. Despite homeowners having over $32 trillion in equity, very little has been accessed through home equity loans.”


Whitney argued for the benefits of the low-interest home equity option:


“Most Americans are feeling the pinch of persistent inflation, especially older Americans on fixed incomes who are also seeing rising insurance costs and property taxes up 26% over the past three years.”


For real estate investors, the potential benefits are clear—access to home equity for activities like renovations, BRRRR strategies (buy-renovate-rent-refinance-repeat), or long-term rental investments, without the constraints of hard money loans or market interest rates. However, the program may not be accessible to everyone.


Whitney clarified:


“Freddie will only approve second mortgages for borrowers already holding a first mortgage with them, and the combined loan-to-value of both mortgages cannot exceed 80% of the property's value. Currently, Freddie’s mortgage portfolio has a loan-to-value ratio of 52%, suggesting it could unlock $980 billion in homeowner equity.”


Departure Before Election Dynamics

Given the potential transformative impact of the innovative product on the residential and small multifamily market, it's surprising that Lown would choose to leave before its full implementation and recognition. However, timing could be a factor.


During the Trump administration, there were proposals to privatize Freddie Mac and Fannie Mae, which had been under government conservatorship since the 2008 financial crisis. Although these plans were shelved during the pandemic, there is speculation that Lown's departure anticipates potential changes in administration following the upcoming election. Investor optimism remains regarding a return to private ownership under different leadership.


“While the logistics of GSE privatization pose challenges, market sentiment suggests a Trump administration could potentially achieve it,” noted Keefe, Bruyette & Woods analyst Bose George following Trump’s Iowa primary win.


The Attraction of CoStar

Setting aside political considerations, the appeal of CoStar is compelling.


Following the retirement of previous CFO Scott Wheeler, Lown joins a rapidly expanding company. CoStar, headquartered in Virginia, reported revenues of $656 million as of April 2024, a 12% annual increase, with cash and cash equivalents totaling $4.95 billion. The company recorded gross profits of $515 million in Q1 2023.


CoStar has experienced significant growth, particularly with its residential real estate platforms like and, the latter becoming a billion-dollar revenue generator. Its recent acquisition of Matterport for $1.6 billion reflects its expansion into digital twin/spatial data technology.


Joining CoStar, Lown has the opportunity to enhance its digital footprint, expand globally, and increase revenue through diverse channels including social media, subscriptions, and advertising.


In summary, Lown’s departure from Freddie Mac amid its innovative strides and financial strength aligns with broader political uncertainties. At CoStar, reporting directly to CEO Andy Florance, he can leverage his financial expertise to further grow a real estate technology firm that has evolved into a prominent residential platform, competing with giants like Zillow and


For Freddie Mac, despite its new initiatives and solid financial standing, the future remains uncertain amid the looming election and the housing market dynamics it serves.

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