Trump May Take Fannie Mae and Freddie Mac Public Again

In a bold move that could upend housing finance as we know it, former President Donald Trump is reportedly weighing a plan to bring mortgage giants Fannie Mae and Freddie Mac back to the public markets—more than a decade after the government seized control of them during the 2008 financial crisis.

If re-elected in 2024, Trump may prioritize privatizing these institutions, an initiative he began exploring during his first term. Now, it seems the conversation is reigniting. But what would this mean for the housing market, investors, and everyday homebuyers?

Why It Matters: Fannie and Freddie Are No Small Fish

Fannie Mae and Freddie Mac aren’t your typical private companies. These government-sponsored enterprises (GSEs) are the invisible engine fueling America’s housing market. They don’t issue mortgages directly, but they guarantee them—buying loans from lenders, bundling them into securities, and selling them to investors to keep the housing finance system afloat.

Combined, they support about half of all U.S. mortgages. Yep, half. So, you can imagine why Washington (and Wall Street) keeps a close eye on their fate.

Back in 2008, when the housing market tanked and banks were on the brink, the federal government had no choice but to place Fannie and Freddie under conservatorship, effectively nationalizing them. That was supposed to be a temporary fix. Now, 15 years later, they’re still under Uncle Sam’s wing—and it’s costing taxpayers dearly.

Trump’s Strategy: A 2025 Game Plan?

According to sources familiar with the matter, should Trump reclaim the presidency, reviving the push to privatize Fannie Mae and Freddie Mac could be high on his list of economic priorities. The idea is to reduce the federal government’s footprint in housing and let the private market do what it does best: compete.

Here’s what we know so far:

• Conversations Have Restarted: People close to the Trump campaign say informal talks are taking place, with key policy advisors looking into various privatization options.
• No Concrete Plan Yet: While it’s a serious consideration, there’s still no official Trump-endorsed blueprint. A lot depends on legislative, regulatory, and market feasibility.
• Big Business Eyes are Watching: Investors and stakeholders are already speculating what “Trump 2.0” will mean for the mortgage finance sector.

Don’t Forget—Trump Tried It Before

This isn’t the first time Trump has kicked the privatization tires. During his presidency, several efforts were made to release Fannie and Freddie from government control, but progress stalled. Red tape, legal challenges, and a lack of bipartisan political support complicated everything.

At the time, Trump’s appointees at the Federal Housing Finance Agency (FHFA) worked toward restructuring and recapitalizing the companies. There was even an attempt to set a framework for them to raise capital and eventually go public again. But the clock ran out—and then came a new administration with different priorities.

To Privatize or Not to Privatize?

This is where things get murky. Let’s break down the potential pros and cons if Fannie and Freddie go public again under a Trump administration:

Potential Benefits

• Reduced Government Risk: Taxpayers are currently on the hook. Privatization could shift risk to private investors.
• Market Efficiency: Free-market advocates argue privatization would promote competitiveness and innovation in mortgage lending.
• Investor Interest: Shares of Fannie and Freddie, still traded over-the-counter, could see surging demand if full privatization proceeds.

Potential Risks

• Higher Mortgage Rates: Some fear privatization might mean higher costs for borrowers, especially low-income homebuyers.
• Housing Market Instability: A rocky transition could cause uncertainty in the nation’s $12 trillion housing market.
• Access Affordability: Fannie and Freddie help underserved borrowers access mortgages. Privatization may shift their focus from mission to profits.

One thing is clear: this isn’t a simple flip-the-switch policy decision. It would take effective leadership, clear legislation, and coordination with housing regulators.

What Wall Street Thinks

Investors have long hoped for a return to normal for Fannie and Freddie stock—which still trades, though with restrictions. News that Trump may renew his focus on taking the companies public again has sparked renewed interest from hedge funds and financial institutions that own billions in shares.

But here’s the rub: until there’s legislation or a concrete plan, it’s mostly speculation. And that’s risky business, especially in a sector as sensitive as mortgage finance.

Not to mention, the Biden administration has been more cautious about moving toward privatization. If he’s re-elected, don’t expect any major changes in the GSEs’ status.

Looking Ahead: What This Means for Homebuyers

So, how could this affect the average American looking to buy their first home?

Frankly, it’s too early to say for sure. Still, privatization could trigger changes—some good, some inconvenient.

• Access to Credit: Fannie and Freddie currently play a key role in ensuring lenders issue loans even to those with modest credit. That commitment could shift if profits become the priority.
• Mortgage Terms: Investors may tolerate less risk than the government, so loan terms could tighten.
• Rates: With less federal backing, interest rates on mortgages could tick up, at least initially.

But supporters argue that a leaner, privately-run Fannie and Freddie would make the market more accountable and dynamic in the long run.

A Political Wild Card

Whether this becomes reality in 2025 hinges on one thing: who wins the next election. A Trump comeback could breathe new life into the privatization agenda. A second Biden term likely means more of the same: stability over shake-up.

It’s an issue that toes the line between policy and politics, between Wall Street and Main Street. And it will almost certainly be part of the broader economic conversation as the campaign season heats up.

The Bottom Line

Trump’s possible push to take Fannie Mae and Freddie Mac public again is about more than just stock tickers and Wall Street portfolios. It’s about the role of government in housing. It’s about who should bear the risk—and the reward—of helping Americans own homes.

It’s still early. Plans are evolving. But if Trump returns to office, don’t be surprised if the GSEs find themselves back in the public eye—perhaps even trading publicly again.

Until then, all eyes are on the 2024 campaign trail.

Stay tuned, and stay informed. The future of American homeownership could depend on it.