Trump Weighs Merging Fannie, Freddie In Possible $30B IPO
The Trump administration is preparing an initial public offering for Fannie Mae and Freddie Mac that could raise $30B for the government, although the details on how to monetize the mortgage giants remain unclear.
The government-sponsored enterprises would IPO as either one combined company valued at $500B or two separate entities, The Wall Street Journal reported, citing unnamed sources familiar with the talks. Between 5% and 15% of the entities' stock would go up for sale.
Saturday, the day after the WSJ’s report, Federal Housing Finance Agency Director Bill Pulte, who is chair of both Fannie and Freddie, posted on X seemingly in support of a merged company.
“FDR created Fannie Mae in 1938 and President Trump may create this in 2025,” with an image of a sign reading “The Great American Mortgage Corporation.”
FDR created Fannie Mae in 1938 and President Trump may create this in 2025. pic.twitter.com/fFwfFMa6Ag
— Pulte (@pulte) August 9, 2025
In response to Pulte on X, billionaire hedge fund manager and Trump ally Bill Ackman said that a merger would reduce mortgage rates as well as “the cost and risks of government oversight as there would be only one institution that would require [Federal Housing Finance Agency] oversight.”
Ackman’s Pershing Square owns roughly 10% of the common shares of both Fannie and Freddie. He has told investors that the likelihood that privatization doesn’t occur during Trump’s administration is near zero, the WSJ reported. He and other longtime holders of the common stock would stand to profit in the case of an IPO.
Fannie and Freddie, which purchase mortgages, bundle them and sell them to investors, entered conservatorship during the 2008 financial crisis, when the Treasury Department bought 79.9% of the companies’ common shares in exchange for senior preferred stock and common stock warrants.
The government guarantees the mortgages to safeguard investors. To exit conservatorship, Fannie and Freddie would have to hold enough capital reserves to absorb losses without taxpayer support.
Privatizing the mortgage giants has long been a topic of consideration for the Trump administration, going back to his first term in office. Even if he does go forward on that plan, Trump has previously said that the federal government will continue to guarantee the loans packaged and sold by the agencies after any stock offering.
Analysts warned that without that guarantee, mortgage rates would rise.
“The market cannot function without the implied guarantee, and any release effort must preserve this backstop,” Wells Fargo strategists wrote in a note to clients, according to the WSJ. “Without it, forced selling by domestic and foreign holders could destabilize” both mortgage-backed securities and housing markets.
Earlier this month, President Donald Trump met with the heads of America’s largest banks to discuss the implications of selling the government’s stakes in Fannie and Freddie. Pulte, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick were all present at those meetings, according to the WSJ.
If Fannie and Freddie were to go public, it would be among the largest stock offerings in history. While it could reduce the country’s deficit, it would also generate large fees for the banks leading the offering. Details on the logistics of the deal are still unclear.
Following the WSJ’s report on the offering plans, common shares of the firms closed 20% higher. Over the past year, as privatization conversations have grown, Fannie shares have gained a whopping 860% and Freddie has soared approximately 730%.
