President Donald Trump is evaluating plans to take mortgage giants Federal National Mortgage Association (OTC:FNMA), or Fannie Mae, and Federal Home Loan Mortgage Corp (OTC:FMCC), or Freddie Mac, according to Bill Pulte, the Director of the Federal Housing Finance Agency.
Mortgage Giants Have $7 Trillion In Assets
On Monday, in a post on X, Pulte said that Trump had made the right decision not to take the government-sponsored enterprises public during his first term in office.
He said that Trump is now “opportunistically evaluating an offering,” which he says could come as “early as the end of 2025.”
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The two companies that were placed under Federal conservatorship during the 2008 financial crisis hold massive sway over the U.S. housing market. Pulte highlighted their size and scale, stating, “Combined, Freddie and Fannie have over $7 trillion of assets on their balance sheets.”
He said that the administration is “focused on running them like a business and taking out costs,” adding that as a result, he thinks there’s no “limit to what they could be worth one day.”
Experts Split Over Freddie And Fannie IPO Plans
Recently, Trump contemplated plans for a unified listing for Fannie Mae and Freddie Mac, which would trade under the ticker symbol “MAGA.”
Economist Peter Schiff slammed the move, saying that it would effectively create a monopoly in the U.S. mortgage market. He said that such a merger could result in a “moral hazard” far greater than what existed before the Great Financial Crisis of 2008.
Billionaire hedge fund manager Bill Ackman has backed Trump’s plans, saying that a merger and the resulting cost synergies can help reduce mortgage rates for homebuyers.
“A merger would also reduce the cost and risks of government oversight as there would be only one institution that would require FHFA oversight,” he said in a post on X. Ackman’s Pershing Square Holdings is currently one of the largest shareholders in Fannie Mae and Freddie Mac.
OTC shares of Fannie Mae and Freddie Mac were up 7.77% and 4.30%, trading at $11.47 and $10.68, respectively, on Monday.
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