Plans to launch a massive IPO are already underway. Here’s how it could impact the GSEs and the mortgage market
President Trump turned heads at the weekend by sharing an image showing himself ringing the opening bell at the New York Stock Exchange for the listing of a company called The Great American Mortgage Corporation.
That apparently AI-generated image, posted on the president’s Truth Social account, strengthened speculation that the administration was considering merging Fannie Mae and Freddie Mac into one entity ahead of a mooted IPO for the mortgage giants later in the year.
It’s not yet clear how combining the two government-sponsored enterprises might work, although mortgage attorney Marty Green (pictured top) of Polunsky Beitel Green told Mortgage Professional America it could see both operate under a new parent company, for which Trump has suggested the stock ticker “MAGA”.
That might mean Fannie and Freddie work in tandem, moving away from the traditional view that the pair – while both under government ownership since the global financial meltdown in 2008 – are in competition. But it might not be as dramatic a change as it seems, Green said, and could prove the right move.
“Of course, they’re GSEs to begin with – the free market is a little bit distant from them,” he pointed out. “They have some advantages with respect to that. But I think there’s certainly some synergies that you could see by combining them.
“There are some efficiencies and probably some cost savings overall that you could probably realize, although to the extent that you want one entity to do things for one purpose and maybe the other with a little bit of a different direction, you might lose the ability to do that.”
Neither entity currently originates mortgages itself, although Fannie mainly purchases mortgages from larger commercial banks and Freddie Mac buys mostly from smaller banks known as thrifts – savings and loan associations.
Billionaire investor Bill Ackman has proposed merging US mortgage giants Fannie Mae and Freddie Mac, arguing the move would lower mortgage rates, streamline oversight, and generate significant operational efficiencies. https://t.co/o0zigQ1tfK
— Mortgage Professional America Magazine (@MPAMagazineUS) August 12, 2025
How a Fannie, Freddie IPO could affect mortgage markets
Ending the conservatorship of Fannie and Freddie has been a longstanding goal of successive Trump administrations, and the planned IPO would mark a huge step in that direction even though it seems clear that the government will retain its implicit guarantee over loans purchased by the GSEs.
Green suggested if the public offering progresses smoothly, it could prove a positive step for the mortgage market in the long run.
“I think actually getting some certainty around the fate of Fannie and Freddie and what it’s going to look like in terms of the liquidity of the mortgage market going forward will be a positive overall in terms of rates,” he said.
“I think some certainty… will perhaps help melt a little bit of the premium that you see for mortgage bonds over Treasury bonds. It might get back to what would be a more normalized spread between the two because it is still elevated today.”
Others aren’t so sure. Moody’s Analytics chief economist Mark Zandi said in 2016 that taking the GSEs fully public would spike mortgage costs by between $1,800 and $2,800 annually for a standard homeowner – and that could rise even higher, he told CNN, for Americans whose incomes or credit scores are lower.
Full IPO launch by year-end may be ‘aspirational’
But it may be a while before the full impact of any prospective merger and IPO becomes clear. While reports indicated the Trump administration was planning to push ahead with the move by the end of 2025, Green said he views a full IPO by January as highly unlikely.
“I don’t think the thought was that they were going to get an IPO concluded by year end. I think that’s too ambitious, even if they were to have all their ducks in a row,” he said. “I think that timeframe is probably more aspirational than it is realistic, and I think what you’re probably going to see is them moving forward toward the announcement of an IPO by the end of the year with some housing around it, perhaps, as to what it’s going to look like.”
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