Plenty of questions remain about when the mortgage giants will be ready for an initial public offering – and what it might look like
Over a month has now passed since reports emerged suggesting the Trump administration was planning a massive initial public offering (IPO) for mortgage giants Fannie Mae and Freddie Mac – but there have been precious few clues yet about how that process might unfold.
Sources speaking to the Wall Street Journal said in August that Trump planned to start the process to move the government-sponsored enterprises (GSEs) out of conservatorship by the end of this year.
But Bill Pulte, who oversees Fannie and Freddie in his role as Federal Housing Finance Agency (FHFA) director, suggested last week in an appearance on Fox Business that the administration was in “no rush” to bring them public, signaling that the decision rested with the president.
The stake being mooted for sale, according to Pulte, is about 5%. To some, his comments on a possible timeline indicate a full IPO is unlikely to arrive before the end of 2025.
“It’s certainly an aggressive timeline, given how little is known about what the plan would be,” PJ Tabit (pictured top), principal economic policy analyst at The Conference Board, told Mortgage Professional America. “To do an IPO of this size would obviously take a while.”
Potential mortgage rate volatility a key consideration
Experts have also emphasized the importance of managing the process of ending conservatorship carefully to avoid inflaming mortgage rates and spreading jitters through financial markets.
A letter to Pulte by Democratic senators Elizabeth Warren, Cory Booker, and Chuck Schumer urged the White House to rein in its plans to bring the mortgage giants public until there’s more clarity on the potential impact on rates.
Fears about a jump in borrowing costs have also arisen during previous deliberations about ending conservatorship, which began amid the global financial meltdown of 2007-08.
“Entering into conservatorship was meant to be temporary. There were discussions about how to exit conservatorship during the Obama administration and during the first Trump administration,” Tabit said.
“There are concerns that without a government role of some kind – a government guarantee or a backstop for the GSEs – that could increase housing costs. And obviously, lowering mortgage costs is a real priority for the administration and policymakers broadly as well. So you’re seeing those tensions play out here.”
For its part, the administration has given no indication that it would be prepared to release Fannie and Freddie without at least some form of government oversight.
In May, a Truth Social post by Trump indicated he still intended to retain the government’s existing guarantees over the GSEs. “I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” he wrote.
A Federal Reserve interest rate reduction now appears all but certain in September, with FedWatch also predicting further cuts in the final two decisions of the year, after the latest US jobs report revealed weaker hiring and rising unemployment.https://t.co/RD68QvNUM8
— Mortgage Professional America Magazine (@MPAMagazineUS) September 5, 2025
Is a Fannie-Freddie merger on the way?
Of course, launching an IPO alone doesn’t indicate an immediate end to conservatorship, with “huge policy questions” to be answered after the public offering on what the government intends the GSEs to look like, Tabit said.
Another Trump social media post last month featured the president standing in front of a “Great American Mortgage Corporation” sign, fueling speculation that his administration could merge Fannie and Freddie into one entity for the IPO.
That’s an approach that would have both upsides and downsides, according to Tabit. “The reason why Freddie Mac was created in the first place was to create some competition, and there are concerns that if you merge them then you sort of remove that element,” he said. “And you’ve seen some mortgage lenders come out and oppose the idea of a merger for that exact reason – particularly smaller lenders.
“But on the other hand, you have benefits of scale and organizationally maybe that’s a little bit better. And if you have two competitors, there’s a race to the bottom in terms of G fees [guarantee fees]. That’s another major concern. So obviously, there are trade-offs there – but we don’t even know if that’s actually the plan the administration would like to pursue.”
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