Published by REALTOR.com | May 22, 2025
Privatization would be a major milestone for Fannie and Freddie, which were created by Congress to bring liquidity to the secondary mortgage market, ensuring a ready supply of loans for homebuyers.
President Donald Trump has confirmed that he is considering privatizing government-backed mortgage giants Fannie Mae and Freddie Mac, a move that could have significant implications for homebuyers and mortgage rates.
“I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public,” Trump wrote on his Truth Social network on Wednesday night. “Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right. Stay tuned!”
Trump said he would decide on privatization “in the near future” following consultations with Treasury Secretary Scott Bessent, Secretary of Commerce Howard Lutnick, and the director of the Federal Housing Finance Agency, William Pulte.
Privatization would be a major milestone for Fannie and Freddie, which were created by Congress to bring liquidity to the secondary mortgage market, ensuring a ready supply of loans for homebuyers.
Threatened with collapse in the 2008 financial crisis, the two entities were bailed out with taxpayer funds in return for preferred shares held by the Treasury, which have paid out more than $300 billion in dividends over the years, surpassing the government’s outlays for the bailout to date.
Since 2008, Fannie and Freddie have remained under government conservatorship, where they are subject to strict oversight and control by the FHFA.
Still, shares of Fannie and Freddie have remained publicly available as over-the-counter stocks. An end to conservatorship, which would release profits back to common shareholders, would be a bonanza for those shareholders, including billionaire Trump supporter Bill Ackman.
Ackman has publicly advocated for an end to government conservatorship for Fannie and Freddie, saying that taxpayers have already been repaid for the bailout, and arguing privatization would restore natural market functioning.
“Conservatorship is supposed to be a temporary measure leading either to rehabilitation or to receivership and ultimately payment of creditors and shareholders,” Ackman said during an online presentation in January.
But for homebuyers, the benefits of privatization are less clear, says Realtor.com® Chief Economist Danielle Hale, who predicts ending the conservatorship would put upward pressure on mortgage rates.
