What to know about Trump's push to bring Fannie Mae and Freddie Mac public

President Trump said this week he may take home lenders Fannie Mae and Freddie Mac public, winding down 17 years of federal control over two central parts of the U.S. housing market — a move that was cheered on by Trump ally and noted Wall Street investor Bill Ackman.

Ending the conservatorship of Fannie and Freddie — which guarantee trillions of dollars worth of mortgages — would be complicated, and critics say it's risky. A plan to do so in Mr. Trump's first term did not come to pass. But the president says he'll decide "in the near future" whether to try again, pointing to the firms' return to profitability since their 2008 government takeover.

"Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right," Mr. Trump wrote on Truth Social late Wednesday — prompting a double-digit rally in shares the next day of both Fannie and Freddie, which trade over the counter rather than on a major stock exchange.

The idea of taking the two government-sponsored enterprises public has drawn some support for years, with advocates arguing Fannie and Freddie could function better if released from federal control. Releasing Fannie and Freddie could also benefit some investors who have bought shares in the firms over the years, betting on an eventual federal spinoff of the mortgage giants.

One of the largest — and most vocal — is Ackman, whose hedge fund Pershing Square Capital Management invested in Fannie and Freddie over a decade ago. The firm is the biggest private holder of Fannie, at just over 115 million shares according to S&P Capital IQ data — worth over $1.2 billion at Friday's price. Ackman said in an earnings call Thursday that Pershing Square owns about 220 million shares in Fannie and Freddie combined.

Other major holders of the two enterprises include Capital Research and Management Company, which has the largest known stake in Freddie ($350 million) and the second-largest stake in Fannie (over $1 billion), according to S&P Capital IQ. Paulson & Co., founded by billionaire John Paulson, also invested in Fannie and Freddie at one point, the Wall Street Journal reported in 2021 — though the size of its current stake is unclear.

Since Mr. Trump was reelected last year, Ackman has publicly pushed on X to end the federal conservatorship of Fannie and Freddie, calling it a good deal for taxpayers that could generate as much as $300 billion for the government. In January, Pershing Square put together a presentation called "The Art of the Deal" that made the case in more detail.

"Trump likes big deals and this would be the biggest deal in history. I am confident he will get it done," Ackman wrote on X in December.

When Mr. Trump announced Wednesday he's "giving very serious consideration" to the idea, Ackman responded on X with a thumbs-up emoji. In Thursday's earnings call, Ackman said, "[W]e're extremely encouraged by the president's announcement." Ackman also said Thursday the firm wasn't aware of any plans by the Trump administration to release Fannie and Freddie from conservatorship.

Famous for his sharp-elbowed activist investing strategy and pandemic-era bets, Ackman has made waves in recent months for his political views. He endorsed Mr. Trump in 2024 and has taken aim at the leadership of Harvard University over its handling of Israel-Hamas war protests.

Skeptics of releasing Fannie and Freddie, like Democratic Sen. Elizabeth Warren, have pushed back on the idea, warning it could benefit investors at the risk of disrupting the mortgage market.

"[The president] hasn't come to Congress with any kind of plan for Fannie Mae and Freddie Mac – and the last thing we need is to privatize them in a way that rewards Wall Street while driving up housing prices for people already struggling to buy homes," Warren, a Massachusetts lawmaker and the top Democrat on the Senate banking committee, told CBS News in a statement.

White House spokesperson Harrison Fields said in a statement, "The Trump Administration is committed to strengthening the Federal Housing Finance Agency (FHFA) to advance the President's mission of restoring the dream of homeownership for all Americans. Any actions under consideration will be carefully evaluated in a safe and sound manner to deliver on the President's historic agenda."

Ackman's Pershing Square declined to comment to CBS News. FHFA — which oversees Fannie Mae and Freddie Mac — did not respond to a request for comment.

The government created Fannie Mae and Freddie Mac — or, more formally, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation — in the 20th century, with Fannie Mae dating back to the Great Depression. They essentially buy mortgages from lenders like banks and bundle them together into guaranteed mortgage-backed securities that can be sold to all kinds of investors — a space known as the secondary mortgage market.

The point of this work is to bring more money into the nation's residential lending system, making it easier for average families to buy a home. Fannie Mae describes itself as "the backbone of the 30-year fixed-rate mortgage."

For decades, Fannie and Freddie were both publicly traded companies, though many observers believed they operated with an "implicit guarantee" that the government would step in if either company wobbled.

But after a mortgage crisis sparked the 2008 recession, the Bush administration bailed out Fannie and Freddie and put them under federal conservatorship to save them from collapse. Since then, the FHFA has effectively controlled the two firms. That arrangement wasn't necessarily supposed to be permanent, but it has lasted for over a decade, with the two companies making billions in payments to the government.

A push for the government to end its conservatorship of Fannie and Freddie has been brewing for years. Some critics view the firms as unfairly dominant in the mortgage industry and believe they fill a role that should be played by the private sector. Other supporters of privatization like Ackman argue it could provide a windfall to taxpayers, partly because, in a holdover from the financial crisis, the government has the right to purchase almost 80% of both firms' shares.

Opponents of privatization argue it could push up mortgage rates, especially if Fannie and Freddie are no longer viewed as backstopped by the government. How that plays out could depend on how the government decides to end the conservatorship, though, and whether it still offers some kind of guarantee. Credit agency Fitch Ratings said it would keep rating Fannie and Freddie's debt similarly to the U.S. government's debt if the firms maintain a federal backstop, but if not, they would be rated separately — and could slip if their market dominance shrinks.

The risk of higher mortgage costs could be a major stumbling block in an era of elevated interest rates. Treasury Secretary Scott Bessent told Bloomberg earlier this year, "anything that is done around a safe and sound release [of Fannie and Freddie] is going to hinge on the effect of long-term mortgage rates."

In part for that reason, Jaret Seiberg, an analyst at TD Cowen, said in a note Friday that the firm expects the Trump administration to make changes to Fannie and Freddie at a "slower and more deliberate" pace than it has moved on other issues, like tariffs.

"Tariffs may have impacted the stock market, but they did not result in immediate price hikes at Walmart or Dollar General. By contrast, the price of mortgages will respond to each recap and release development," Seiberg wrote. "That makes the political cost more immediate and gives the President less room to alter positions as he has done on trade."

In his first term, Mr. Trump's Treasury Department proposed ending Fannie and Freddie's conservatorship. While the first Trump administration ultimately didn't take this step, it made some changes to how the two institutions operate.

Ackman's Pershing Square called releasing Fannie and Freddie the "Unfinished Business of the First Trump Administration" in its January presentation. The firm laid out a possible roadmap to turn Fannie and Freddie into independent publicly traded companies: It suggested holding initial public offerings by 2026 for Fannie and 2027 for Freddie, and then allowing the federal government to sell its stakes over five years.

But it's unclear how — or if — the Trump administration may pursue the idea. In his Senate confirmation hearing earlier this year, FHFA Director William Pulte said he believed that any end to government control of Fannie and Freddie needed to be "extremely thoughtful."

"While their conservatorship should not be indefinite, any exit from conservatorship must be carefully planned to ensure the safety and soundness of the housing market without upward pressure on mortgage rates," Pulte said.