NatalieLopez
23 May 25
President Donald Trump is considering taking mortgage finance giants Fannie Mae and Freddie Mac public again through an IPO, which could significantly affect mortgage costs. Currently majority-owned by the U.S. Treasury since the 2008 financial crisis, these entities play a key role in the housing m...
President Donald Trump announced he is seriously considering taking mortgage finance giants Fannie Mae and Freddie Mac public again, potentially altering mortgage costs significantly. In a Thursday evening Truth Social post, Trump highlighted that these entities are currently performing well and generating substantial cash flow, suggesting that the timing could be ideal for this move. Though Fannie Mae and Freddie Mac are traded over-the-counter, the U.S. Treasury holds majority ownership, maintaining government control since the 2008 financial crisis. The proposal likely entails divesting government stakes and reintroducing these companies to the stock market via an initial public offering (IPO).Fannie Mae and Freddie Mac play a critical role in the housing market by purchasing mortgages from lenders, thereby ensuring steady liquidity and enabling financial institutions to offer more home loans. Their government conservatorship, established during the 2008 meltdown, facilitated a bailout while granting the Federal Housing Finance Agency (FHFA) broader operational authority. Trump plans to consult with key figures such as Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and FHFA Director William Pulte before making a final decision. Notably, Pulte supports releasing the entities from government oversight, whereas Bessent has emphasized evaluating impacts on mortgage rates.Concerns abound that returning Fannie Mae and Freddie Mac to the private sector may elevate mortgage rates. Moody’s Chief Economist Mark Zandi cautions that borrower costs could surge by $1,800 to $2,800 if the transition is mismanaged. Conversely, Pershing Square CEO Bill Ackman underscores the potential financial upside for the U.S. government, projecting up to $300 billion in profits. Ackman, whose investment portfolio includes Fannie and Freddie stock, asserts these companies are now sufficiently capitalized to thrive as private entities, signaling a pivotal moment in housing finance reform.