Trump Housing Director Bill Pulte Launches Probe into Fannie Mae & Freddie Mac’s SHARIA LAW Home Financing

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!”

We are looking into this right now. Thanks for mentioning! https://t.co/SzsNzKOKxW

— Pulte (@pulte) August 13, 2026

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.

Guidance Residential, a private Islamic home-financing company, publicly states that it brings Freddie Mac, and, according to another passage on its website, Fannie Mae, into its transactions as investors.

The company describes its product as “Islamic co-ownership financing.” Instead of issuing a conventional interest-bearing mortgage, Guidance says it purchases a home alongside the buyer. The buyer then gradually acquires the company’s ownership share while paying for the use of the remaining share.

Guidance says the arrangement was constructed to satisfy Sharia principles prohibiting riba, or interest. It also claims that its Sharia board and 18 law firms developed a contract under which Freddie Mac can participate without purchasing conventional debt.

“Guidance simply brings on Freddie Mac as an additional investor,” the company states.

As RealClearInvestigations reported in May 2026, federal data show Fannie Mae and Freddie Mac have become the primary investors in these Islamic mortgages, injecting billions of dollars in liquidity.

The Center for Security Policy and other national-security analysts have warned for years that Sharia-compliant finance can serve as a vehicle for broader ideological penetration and potential material support networks. Yet under previous administrations, the practice continued largely without scrutiny at the highest levels of FHFA.

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