Fannie and Freddie Eye $30 Billion IPO in 2025 as Privatization Accelerates

The U.S. administration is pushing ahead with plans to bring Fannie Mae and Freddie Mac back to public markets by the end of 2025, in what could be one of the largest stock offerings in American history. The proposed initial public offering could raise around $30 billion and value the two mortgage-finance giants at up to $500 billion combined, marking a decisive step toward ending more than 16 years of federal conservatorship.

Markets React to the Prospect of Listing

Shares of Fannie Mae and Freddie Mac, which trade over-the-counter, jumped about 20% following reports of the IPO plan, underscoring strong investor interest in regaining exposure to these central pillars of the U.S. housing finance system. For traders, the sudden surge reflects both optimism over potential profits and the speculative nature of a deal still subject to political and regulatory approval.

White House in Talks With Wall Street

President Trump has met with senior executives from Citigroup and Bank of America to explore options for structuring the deal. Key decisions—such as whether the two entities will list separately or as a combined entity—remain open. While the administration is keen to fast-track the process, analysts note that unwinding the complex legal and capital structures of both companies will be challenging.

From Crisis Bailouts to Market Return

Fannie Mae and Freddie Mac were placed under the control of the Federal Housing Finance Agency in 2008 after the collapse of the mortgage market. Since then, both have repaid their government bailouts and built up capital buffers. A public offering would complete a dramatic turnaround from their near-collapse during the financial crisis and shift the U.S. mortgage market further toward private capital.

Caution Over Execution Risks

Despite the market’s initial enthusiasm, skepticism remains high. Analysts point to unresolved questions over capital requirements, ongoing regulatory oversight, and the possibility of policy reversals in a future administration. Some lawmakers argue that the government’s implicit backing is critical to housing affordability and should not be removed too quickly, warning of potential disruption to mortgage rates and availability.

Tips for Traders

• Watch OTC movements in Fannie Mae and Freddie Mac shares as early sentiment indicators before any IPO announcement.

• Track major underwriting banks for signs of mandate awards or deal structuring details.

• Monitor mortgage-backed securities markets, as supply dynamics could shift with privatization.

• Be alert to regulatory changes in housing finance that could influence valuation and investor appetite.

• Assess sector spillovers, particularly in mortgage lending, real estate, and housing-related equities.