On Wednesday, Treasury Secretary Timothy Geithner broke the silence about the administration's plans for the GSEs: a detailed legislative proposal will be coming in 2011. "We do not think it is necessary to consolidate the full obligations of Fannie and Freddie onto the nation's budget," he told the House of Representatives Budget Committee. "But we do think it is important that we make it clear to investors around the world that we will make sure that we will take the actions necessary to keep the two companies stable." The Treasury would develop a few "broad principles" for restructuring Fannie and Freddie this year, he added.

Into this vacuum has moved any number of proposals for the GSEs, from Congresspeople to industry groups such as the Mortgage Bankers Association. The most recent comes from the National Association of Realtors, which would like to convert the GSEs to non-profit entities owned by the US government. In essence, this plan would make explicit the government's backing of Fannie and Freddie, while leaving their missions relatively intact.

The current model of "private profit and public loss" is inherently flawed, NAR spokesman Lucien Salvant tells GlobeSt.com. Therefore NAR is proposing that the GSEs should be converted into self-sustaining, government-chartered non-profit entities, he says.

"The new secondary mortgage market entities would use revenue generated from their business to fund their operations," he explains. "Any excess revenue generated in strong markets would be accumulated in order to pursue a countercyclical policy in weaker markets, and to support the secondary market, provide for innovation, remain mission focused, and maintain their capacity."

Not surprising, there are questions. "Formally removing the profit motive is fine and reflects current reality, but in order to be self-sustaining, even non-profits have to at least break-even in their operations," says LaFonte Nesbitt, a partner in Holland & Knight's Real Estate practice.

"The fees paid to, and other revenues of, Fannie Mae and Freddie Mac as non-profits would need to equal or exceed their costs of operations and any losses they would suffer on mortgages. And it is not clear how that would happen," he tells GlobeSt.com.

"Otherwise taxpayer dollars would still be necessary." Nesbitt says he understands that the NAR seeks to mitigate taxpayer risk through the use of mortgage insurance on certain higher LTV mortgages and with MBS guarantee fees. "However, until many more details emerge, use of explicit federal government guarantees makes it hard to understand how the newly non-profit Fannie and Freddie would be different from FHA or Ginnie Mae; or at least different enough that it makes sense to continue them as separate government-sponsored entities."

For many in the commercial real estate space—or rather, for those that rely on the GSEs for multifamily finance—any delay in debate and subsequent government action on their ultimate fate is just fine. Another year of the status quo brings the industry that much closer to a healthier financial and capital markets where multifamily could possibly find support, says a source that uses the GSEs.

Meanwhile the GSEs are forging ahead with their mission never mind what Congress and the Administration may be planning for the long run. "We continue to see increasing interest in our deals and products, and we will be increasing the number of deals we do as a result," Freddie Mac's David Brickman, VP of multifamily capital markets and CMBS told GlobeSt.com in January during the CMSA conference held in Washington, DC.

The GSE plans to broaden and deepen its capabilities where possible, he adds. For example, it is looking to introduce fully-guaranteed securities to accommodate financing needs of more borrowers—such as deals that are difficult to sell because they are more highly structured. "In general we are moving more fully to a securitization model where the vast majority of assets are purchased and securitized."