Catenaa, Monday, August 18, 2025- The Trump administration has floated the idea of selling down the government stakes in Fannie Mae and Freddie Mac, a move that would amount to the largest IPO in history under current values being weighed.
Plans being discussed within the administration, first reported by the Wall Street Journal, could involve a 5% to 15% sale of Fannie and Freddie shares at a combined $500 billion valuation or more.
In the meantime, President Trump is still weighing all of his options. That means plans could change. He has met in recent weeks with CEOs for some of the biggest Wall Street banks, including JPMorgan Chase’s Jamie Dimon, Bank of America’s Brian Moynihan, and Citigroup’s Jane Fraser, to discuss the mortgage giants.
So far, the government’s plan for kicking off a public offering for the mortgage giants has left analysts and housing experts alike a bit baffled. Some are questioning whether such a sizable and complex stock offering could get done before the end of 2025.
Fannie Mae and Freddie Mac, also known as the Federal National Mortgage Association and Federal Home Loan Corporation, play essential roles in the US housing market by purchasing mortgages and then packaging and selling them as bonds to investors.
Both fell under government conservatorship during the 2008 financial crisis, when mortgage defaults soared. Untangling the two firms from the government’s control has been a long and hotly debated matter.
Some prominent Wall Street investors, including billionaires Bill Ackman and John Paulson, placed their bets years ago by purchasing common and preferred stock in Fannie and Freddie, expecting the conservatorship for the two companies would eventually end.
The mortgage giants face a $181 billion gap in the amount of loss-absorbing capital they are required to set aside in the event of a downturn.
The Trump administration has, so far, stirred clear of signaling a desire to shift the mass perception that the government will backstop these firms in a crisis.
“I want to be clear, the US Government will keep its implicit GUARANTEES,” Trump said in late May.
This guarantee allows Fannie and Freddie to buy mortgages, package them as bonds, and sell them to investors at a lower credit rating. It remains hotly debated whether the administration will need to take further steps to ensure this guarantee does not weaken.
