What a Fannie and Freddie IPO Would Mean for Homebuyers
If President Trump gets his way, the US government could relinquish control of the mortgage giants. Here’s what to know about the privatization chatter.
Illustration by Hannah Lock for Bloomberg Markets
Nearly two decades after the US federal government took over mortgage giants Fannie Mae and Freddie Mac, the future of the companies is once again up for grabs. In a series of posts in May on Truth Social, President Donald Trump declared that he intended to return the companies to private ownership. Yet Trump also pledged that the government would continue to function as a backstop to both entities, a move that could keep the government deeply entwined in housing finance even as it relinquishes formal control.
The companies, which nearly collapsed during the 2008 financial crisis, play a crucial role in making mortgages available for US homebuyers. Fannie and Freddie also have been the focus of a group of hedge fund managers and retail investors who picked up the leftover shares of the companies — often at bargain-basement prices — after the government stepped in, and now hope to see a windfall.