Trump Admin Planning IPOs For Fannie Mae And Freddie Mac: Official

Authored by Aldgra Fredly via The Epoch Times,

The Trump administration is seeking to launch an initial public offering of shares in mortgage giants Fannie Mae and Freddie Mac later this year, a senior administration official said on Friday.

The IPOs could give the two government-backed entities a combined valuation of nearly $500 billion, according to the senior official, who spoke on condition of anonymity.

Details of the share sale have not been disclosed, and it remains unclear whether the companies would go public as a single entity or separately. The official said that President Donald Trump is weighing all options.

The Epoch Times has sought comments from Fannie Mae and Freddie Mac, as well as the Federal Housing Finance Agency (FHFA), which regulates the entities, but did not receive a response by publication time.

Fannie Mae and Freddie Mac provide liquidity and stability to the U.S. housing mortgage market, which have been placed under government conservatorship since 2008 following a substantial downturn in housing markets at the time, according to the FHFA.

The two entities buy mortgages from lenders and either hold the mortgages in their portfolios or sell them as mortgage-backed securities.

It is uncertain whether the entities would remain under government conservatorship if the IPOs move forward. The Treasury Department holds preferred shares in the companies and warrants to purchase about 80 percent of their common stock, according to a 2021 statement.

Trump initially announced in May his plan to take Fannie Mae and Freddie Mac public, saying he would discuss with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and FHFA Director William Pulte before making a decision.

The president later emphasized that the government would retain its oversight of the two entities, even as it relinquishes control by taking them public.

“I am working on taking these amazing companies public, but I want to be clear, the U.S. Government will keep its implicit guarantees, and I will stay strong in my position on overseeing them as President,” he wrote on social media.

Bessent told Bloomberg in February that the release of the two entities from government conservatorship would depend on the implications of mortgage rate trends.

“The priority for a Fannie and Freddie release, the most important metric that I’m looking at, is any study or hint that mortgage rates would go up,” he said.

A primary mortgage market survey by Freddie Mac showed that U.S. mortgage rates have continued to decline, with the 30-year fixed-rate mortgage averaging 6.63 percent as of Aug. 7, down from 6.72 percent the week before.

Sam Khater, chief economist at Freddie Mac, stated that the market research indicates that homebuyers could potentially save thousands of dollars by getting quotes from a few different lenders.