The prospect of merging Fannie Mae and Freddie Mac has suddenly taken center stage in the Trump administration’s plans to privatize the mortgage giants, adding a dramatic new twist to a story that until now has mostly focused on the details of an enormous initial public offering. In recent days, prominent investor Bill Ackman publicly advocated combining the two government-sponsored enterprises, arguing the move would unlock operational synergies and potentially reduce mortgage rates—a suggestion that quickly reverberated among policymakers. The administration is now openly weighing whether to move forward with IPO plans as two separate entities or pursue the bolder strategy of a single, unified listing. A senior administration official has confirmed to Axios that Trump was weighing all options for how to handle the sale, including somehow combining and selling the two as one entity.
On Friday, multiple sources confirmed to The Wall Street Journal of the administration’s intent to sell shares in the companies before year’s end, with estimates that a partial offering of 5–15% of the firms could raise up to $30 billion and value the pair at roughly $500 billion combined. The potential scale would make it one of the largest IPOs in history. However, officials have yet to agree on a structure: one senior figure acknowledged that merging the companies could further streamline oversight and enhance liquidity, but also warned that combining their balance sheets might increase systemic risk.
The notion of a “MAGA” listing—combining both under a new entity and ticker symbol—was amplified by President Trump on social media over the weekend, fueling speculation about the final form the public offering may take. While details remain unsettled, the administration has insisted that any privatization will retain some form of government backstop to reassure investors and keep mortgage rates stable. Bank CEOs from Wall Street’s largest institutions have been summoned to Washington to consult on the plan, but their involvement underscores how unorthodox this project is and how much remains unresolved.
For years, Fannie Mae and Freddie Mac have remained under the government’s conservatorship, a legacy of their 2008 bailout during the financial crisis. They continue to play an outsize role in supporting the U.S. housing market, purchasing mortgages from lenders and packaging them into securities for investors—a system that underpins access to the 30-year fixed-rate mortgage for millions of Americans. The government holds warrants to purchase about 80% of the companies’ common stock, alongside substantial preferred shares, making the federal stake a potential windfall if sold.
Housing advocates and market analysts have cautioned that upending the implied government guarantee could lead to higher borrowing costs and disrupt housing markets. Wells Fargo strategists have warned that simply removing federal support might trigger destabilizing sales and rate increases for mortgage-backed securities. Meanwhile, the Federal Housing Finance Agency maintains that keeping the firms under conservatorship during an IPO is still possible, though it has yet to clarify how such an arrangement would work in practice.
Investors such as Ackman, who for years have positioned themselves in anticipation of privatization, stand to gain substantially from any offering, while taxpayers could benefit if the IPO proves lucrative. Yet as with past privatization attempts, there is no guarantee a final deal will be reached, nor that Congress will agree to any proposal that reshapes the core of U.S. mortgage finance. The next several weeks will be critical, as officials must decide whether to move forward with separate offerings, pursue the high-profile merger, or pause efforts amid persistent market and regulatory uncertainty.
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