Bringing the mortgage giants public in 2025 could be easier said than done
The Trump administration appears to be pushing ahead with plans to bring mortgage giants Fannie Mae and Freddie Mac public, with reports in recent weeks suggesting efforts are afoot to launch a massive initial public offering (IPO) of the government-sponsored enterprises (GSEs) by the end of 2025.
But that move – which would likely be the largest IPO in history – could be fraught with complications, and there are plenty of hurdles before the president can realize a longstanding Republican goal of releasing Fannie and Freddie from conservatorship.
The first, most obvious question for the Trump administration is how it intends to structure the offering, and whether both companies would be listed separately or as part of a combined entity.
When news of the rumored IPO plans first broke, Trump shared an AI-generated image of himself standing in front of a “Great American Mortgage Corporation” banner, fueling speculation that his administration could be preparing to merge the two GSEs.
Even once that arrangement is confirmed, there’s a huge amount of administrative legwork to get through before launching the IPO, according to mortgage lawyer Marty Green (pictured top) of Polunsky Beitel Green.
He told Mortgage Professional America that could prove a lengthy process. “Once you decide on your structure, then you have all the things that you typically do with the stock offering, which means that you have to draft a lot of documents to understand and explain what the dynamics of your deal are, how it’s going to work and operate,” he said.
“You have to file registration statements with the SEC [Securities and Exchange Commission]. You have to meet with the SEC to get comments on it. You have to revise documents based upon those comments and all those kinds of things.”
MBA Chief Economist Mike Fratantoni stresses that while freeing Fannie & Freddie could bring back speed and responsiveness, safeguards are crucial.https://t.co/v4Dfh4eblu
— Mortgage Professional America Magazine (@MPAMagazineUS) August 18, 2025
Financial markets closely watching developments at the GSEs
Another essential consideration will be keeping financial markets onside with such a large offering, a factor Green said may push out the timeline for an IPO further.
That suggests selling government stock in Fannie and Freddie by the end of 2025, as reportedly planned, may be overly ambitious. “If the administration is all in alignment about trying to make this happen, then I think you have a very friendly SEC looking at your documents and that can fast-track things,” he said.
“But fast-tracking something of this size and scale on a 90- to 120-day timeframe doesn’t seem to make sense because you want to be careful about it to avoid spooking the markets and to make sure everyone knows and is comfortable with what you’re doing.”
Instead, he’s eyeing a slightly wider window for an end to conservatorship. “There’s really not an urgency to try to get it done and truly concluded in 2025. So I think a more realistic calendar would have that [postponed] until at least the first quarter of next year.”
What might become of the implicit government guarantee?
One of the biggest questions about a potential end to conservatorship has always concerned the government’s guarantee over the GSEs, and its future if they’re taken public.
While there’s never been a formal, statutory guarantee that the government will cover Fannie or Freddie’s obligations, investors have long believed their sheer size and importance mean they would never be allowed to default.
But Green said it seems almost certain there’ll be no change to that status even if or when they become fully public.
“I think the administration has been pretty clear that there’ll be an implicit guarantee,” he said. “Going back to Mark Calabria [the Federal Housing Finance Agency (FHFA) director during Trump’s first presidency], he’s made a very good point that as a practical matter, they’re too big and important to the economy to ever let them fail.
“By definition, they kind of have an implicit guarantee by virtue of that. And then President Trump has on numerous occasions [mentioned] the importance of the implicit guarantee from his perspective. So I don’t see that really as being at risk, and I think the market has come to accept that.”
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