The U.S. administration is preparing to sell shares of mortgage giants Fannie Mae and Freddie Mac in public markets as soon as late 2025, with media reports indicating a fundraising target around $30 billion via an initial sale of roughly 5%–15% of equity. The move would mark the most significant step toward returning the government-controlled housing finance firms to private ownership since they were put into conservatorship in 2008.
Over the weekend, President Trump appeared to acknowledge the timing by posting an image hinting at a November 2025 listing, following earlier reporting that officials are working toward a year-end transaction. Last week, he also met with major bank CEOs as part of ongoing discussions on the planned offering and privatization path.
Why it matters
Fannie Mae and Freddie Mac underpin more than half of U.S. residential mortgages by buying loans from lenders and packaging them into securities—an architecture designed to expand access to credit, lower financing costs, support low- to moderate-income and special-needs borrowers, and promote market stability. Any shift in ownership or mandate will have far-reaching effects on lenders, investors, and homebuyers.
What’s being discussed
• Offering size & structure: Reports point to an initial sale that could raise about $30B this year; analysts debate feasibility and valuation, noting the aggressive timeline from conservatorship to public float.
• Potential merger idea: Investor Bill Ackman has publicly floated combining the two entities, arguing it could enhance efficiency and potentially lower mortgage rates—an idea that is speculative and would require complex approvals.
• Political signaling: Weekend social posts and public remarks have amplified expectations around a 2025 transaction, though exact mechanics (IPO vs. follow-on secondary sales) and post-sale governance remain to be finalized by Treasury and FHFA.
Key questions ahead
1. Affordability & access: Can privatized entities continue to prioritize broad access to mortgage credit and serve lower-income borrowers without raising costs? Housing advocates and some analysts warn that profit incentives, if weakly regulated, could erode affordability.
2. Market stability: How will capital requirements, guarantee structures, and supervisory frameworks evolve to safeguard the system and avoid a repeat of pre-2008 risk-taking? FHFA’s role and the final capital framework will be central.
3. Execution risk: Timeline, valuation, bank syndication, and investor appetite are open variables. Several experts call the 2025 schedule “extraordinarily aggressive.”
The bottom line
Plans to sell shares in Fannie Mae and Freddie Mac represent a historic shift for U.S. housing finance. Supporters argue privatization and potential consolidation could streamline operations and lower mortgage rates; skeptics caution that the timetable and valuation may be optimistic and emphasize the need to preserve the GSEs’ public-interest mission. Until the offering documents and regulatory terms are finalized, outcomes for affordability, credit availability, and market stability remain the critical watch-items.
