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Fannie Mae and Freddie Mac IPO plans revealed: Inside Trump's $500 billion move
President Donald Trump's administration is reportedly moving forward with plans to sell a portion of its holdings in mortgage giants Fannie Mae and Freddie Mac
President Donald Trump's administration is reportedly moving forward with plans to sell a portion of its holdings in mortgage giants Fannie Mae and Freddie Mac, potentially launching the offering as soon as this year, the Wall Street Journal reported on Friday, citing sources. The report sent shares of both companies soaring as much as 22% on Friday, their largest intraday gain in over two months.
The proposed sale could value the two government-controlled firms at $500 billion or more. Between 5% and 15% of their shares would be offered to investors, which could generate roughly $30 billion in proceeds, the report said.
Fannie Mae and Freddie Mac were taken over by the federal government in September 2008 during the financial crisis to prevent devastating losses in the housing market. Since then, lawmakers have wrestled with how to return the so-called government-sponsored enterprises to private control. Multiple congressional attempts have faltered over concerns that privatization could raise mortgage costs or weaken the companies’ commitment to affordable housing.
President Trump has recently heard proposals from top banking executives on how to navigate the complicated process, the Journal reported. The White House and the Federal Housing Finance Agency have not yet reacted to the WSJ report.
Mortgage rate is at lowest level
The average rate on a 30-year US mortgage has fallen to its lowest level in four months, welcome news for prospective homebuyers who have been held back by stubbornly high home financing costs.
The long-term rate fell to 6.63% from 6.72% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.47%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped to 5.75% from 5.85% last week. A year ago, it was 5.63%, Freddie Mac said.
Elevated mortgage rates have helped keep the U.S. housing market in a sales slump since early 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic. Home sales sank last year to their lowest level in nearly 30 years.
(With AP inputs)
