The White House has suggested kicking off public offerings for Fannie Mae and Freddie Mac later this year, according to a senior administration official.
Now, some of Trump’s biggest supporters want them returned to the public market, in a share sale that could generate tens of billions of dollars for the government, as the combined value of Fannie and Freddie amounts to US$500 billion, according to the anonymous government official.
The mortgage finance giants have been under government control since 2008 after being rescued and put under conservatorship due to being crucial to the mortgage market.
They were created by Congress to support the housing market and ensure affordable mortgage financing, but crumbled after being crushed by the financial crisis before being bailed out by taxpayer funds.
In return, the Department of Treasury received preferred shares, which paid billions of dollars in dividends over the years.
Due to the U.S. mortgage market becoming healthier, there have been efforts to return them to private control, including during Trump’s first term, but they’ve failed to gain traction.
“While Fannie Mae and Freddie Mac are very different from the types of companies that have recently tapped into the IPO market, pent-up demand for new stocks could be tailwinds for their listings," said Angelo Bochanis, data and index associate at Renaissance Capital, a provider of IPO-focused research and ETFs.
