The companies had argued that allowing them to take on more debt would help pump cash into the struggling mortgage market.
The disclosure by the Office of Federal Housing Enterprise Oversight came at the end of a week of speculation that the regulators would allow the government-sponsored companies a wider investment berth. The companies' shares had soared on Wall Street in an otherwise skidding market.
OFHEO director James B. Lockhart said the risk of allowing the companies to take on more debt was too great.
Combined, Fannie and Freddie hold or guarantee two-thirds of all US home mortgages. "Their safety and soundness is of paramount importance," Lockhart said.
It was Lockhart's office that installed caps last year on the companies' mortgage investment holdings in response to multibillion-dollar accounting scandals at both companies in recent years.
Fannie's debt cap is set at $727 billion, Freddie's is set at $724 billion.
"The marketplace should have confidence that [the companies'] securities are trading efficiently," Lockhart said in a statement. He said the agency would keep the request for an increase "under active consideration" and continue to reassess the issue.