(Bloomberg) — Fannie Mae and Freddie Mac are expected to retain “limited and tailored government support” after they are freed from U.S. control, Treasury Secretary Steven Mnuchin said in a letter to lawmakers seeking information on the Trump administration’s plans for the mortgage giants.

Responding to questions posed by Senate Democrats, including Mark Warner and presidential contender Elizabeth Warren, Mnuchin and Federal Housing Finance Agency Director Mark Calabria elaborated on their plans for ending the federal conservatorships that have been in place since the government-sponsored enterprises, or GSEs, were seized during the 2008 financial crisis.

In their letter, Mnuchin said the Treasury Department was prepared to continue support of Fannie and Freddie pending congressional action to provide an explicit guarantee of the companies’ securities.

“Treasury expects that it will be necessary to maintain limited and tailored government support” to provide confidence that the GSEs will meet their financial obligations, Mnuchin wrote. “Stability in the housing finance system is crucial, and there should be no disruption to the market as a result of Treasury’s recommended administrative reforms.”

The lawmakers sent almost two dozen questions to the Treasury and FHFA in December, seeking information on matters ranging from the potential impact releasing Fannie and Freddie would have on the trillions of dollars in mortgage securities that the companies backstop to whether housing costs will rise.

Warner and the others said their questions were crucial in assessing whether the Trump administration’s proposals would ensure “housing access and affordability, and the continued success of the secondary mortgage market.”

Mnuchin’s response could help quell concerns that bond investors, banks, credit rating companies and even real estate agents have raised about the plans for overhauling Fannie and Freddie, which backstop $5 trillion in mortgage bonds.

Groups including the Securities Industry Financial Markets Association, one of Wall Street’s top lobbying groups, have warned that making changes without an explicit guarantee of Fannie and Freddie’s bonds could be devastating to the market. Only Congress can provide an explicit guarantee. Keeping some sort of commitment with the Treasury could be seen as a second-best option.

Mnuchin reiterated that he would prefer to work with Congress on a plan including providing an explicit guarantee, but he also outlined some of the administrative changes that the Treasury and FHFA are pursuing on their own. He said that the Treasury’s plan for housing reform wasn’t “prescriptive with respect to a specific path or the timeline” about how they would free Fannie and Freddie.

A spokesman for Warner expressed appreciation for the Treasury and FHFA’s responsiveness and said that the lawmakers expect that the conversation will continue.

Mnuchin and Calabria didn’t provide any details on some of the thorniest questions that still need to be worked out, including how to deal with shareholders. Hedge funds including Pershing Square Capital and John Paulson & Co. have billions at stake if Fannie and Freddie are freed. Mnuchin and Calabria said they haven’t made any decisions regarding the Treasury’s repayment requirements.

Calabria has previously outlined an ambitious timeline for how quickly Fannie and Freddie would be ready to raise capital from outside investors. He also has described a possible scenario where there might be a period where the mortgage giants’ operate under a consent agreement where they are technically out of conservatorship but not completely free from the government’s grip. In the letter to lawmakers, Calabria said a consent agreement wouldn’t “necessarily accelerate the end of conservatorship.”

In their letter, Mnuchin and Calabria said that they believe that Fannie and Freddie will “need to raise third-party capital,” but declined to offer any details of how soon that could happen. Other options would be for Fannie and Freddie to just continue to retain more of their profits to meet benchmarks required before they can be set free.

To contact the reporter on this story: Elizabeth Dexheimer in Washington at edexheimer@bloomberg.net

To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott, John Harney

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Fannie-Freddie May Be Freed With Treasury Backstop, Mnuchin Says