Proposal comes as the Trump administration considers what could be the largest IPO in US history
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.
In a post on X, formerly Twitter, late Sunday, Ackman said combining the two government-sponsored enterprises (GSEs) would enable them to achieve huge synergies both in their operations and in the trading price and spreads of their MBS, savings which could be passed along to consumers in the form of reduced mortgage rates. He added that a merger “would also reduce the cost and risks of government oversight as there would be only one institution that would require FHFA oversight.”
Ackman’s comments come as US president Donald Trump’s administration considers what could be the largest initial public offering in history. A senior administration official told Reuters on Friday that the White House is weighing an IPO of up to 15% of the two companies’ shares, potentially raising $30 billion and valuing the pair at nearly $500 billion combined. The Wall Street Journal first reported the plan.
Shares of both companies surged more than 20% on Friday after reports of the possible privatization.
Trump, who has long sought to take the mortgage finance firms out of government conservatorship, acknowledged the IPO discussions over the weekend, The Economic Times reported. During his first term, Trump attempted but failed to privatize the companies, which were taken over during the 2008 financial crisis. In May, he wrote on Truth Social that he was giving “very serious consideration” to bringing them public again.
Ackman, who has held stakes in the GSEs for over a decade, told Forbes last month that privatization could yield as much as $300 billion in gains for the US government. He noted the companies are “vastly better capitalized” now than at any time in the past 60 years, with $7 trillion in guarantees, strong cash flows, and continued federal backing.
Fannie Mae and Freddie Mac were created by Congress to support affordable home financing by purchasing and securitizing mortgages. Both collapsed under the weight of the 2008 housing crisis and have since operated under the oversight of the Federal Housing Finance Agency.
If the administration moves ahead, the IPO could take place later this year, though officials stress no final decision has been made.
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