- The Trump administration is exploring privatizing Fannie Mae and Freddie Mac, with an executive order directing agencies to study the impact of ending government conservatorship.
- A potential IPO could raise $20B–$30B, with estimates valuing the government’s stake in the agencies at over $250B.
- Treasury Secretary Scott Bessent has suggested using the funds to seed a U.S. sovereign wealth fund.
- Newly appointed FHFA head Bill Pulte has begun restructuring leadership at both agencies, sparking concerns about housing market stability.
Privatization on the Table
The Trump administration is reviving efforts to privatize Fannie Mae and Freddie Mac. The White House is considering an executive order that would direct federal agencies to study the impact of removing the mortgage giants from government oversight, according to Bisnow.
A proposal circulating within the administration suggests raising $20B to $30B through an IPO or similar investment structure. The two agencies’ total valuation is estimated to exceed $330B, with the government’s stake surpassing $250B. If privatized, these funds could serve as the foundation for a U.S. sovereign wealth fund, an idea Treasury Secretary Scott Bessent floated last week.
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Leadership Shake-Up at FHFA
The speculation follows major leadership changes at the Federal Housing Finance Agency (FHFA). Bill Pulte, confirmed as FHFA director on March 13, has wasted no time reshaping Fannie Mae and Freddie Mac. Within days, he removed eight Fannie board members and appointed four new appointees. He also dismissed six Freddie board members and appointed three replacements. Freddie Mac CEO Diana Reid was also abruptly fired.
One of Pulte’s initial appointees, Christopher Stanley—a cybersecurity engineer at Elon Musk’s SpaceX and X—resigned without explanation a day after his appointment. Meanwhile, the National Treasury Employees Union reports that dozens of FHFA employees, including those overseeing fair housing enforcement, have been placed on indefinite administrative leave.
Implications for the Housing Market
Fannie Mae and Freddie Mac play a crucial role in the U.S. housing market by purchasing mortgages on the secondary market, ensuring liquidity for lenders, and supporting the widespread availability of 30-year mortgages. While Republicans have long sought to remove them from government oversight, the impact of privatization on mortgage rates and housing affordability remains a key concern.
Pulte has supported ending conservatorship but acknowledged that any transition must ensure financial stability and avoid disrupting mortgage rates.
What’s Next?
While no formal decision has been made, the potential privatization of Fannie and Freddie would mark one of the biggest financial shifts in U.S. housing policy in decades. If the White House moves forward with an executive order, the coming months could see intense debate over the future of the housing finance system—and the viability of a U.S. sovereign wealth fund.
Privatizing Fannie and Freddie would be one of the most significant housing finance reforms in decades, potentially altering mortgage markets and home affordability. While supporters argue it could enhance efficiency and reduce taxpayer exposure, critics warn it could lead to higher mortgage rates and reduced access to home loans.
Pulte has publicly supported ending conservatorship but has also emphasized the need to consider its impact on mortgage rates. As speculation mounts, the administration’s next steps could reshape the future of U.S. housing finance.
