Trump plans IPO for Fannie, Freddie later this year

The Trump administration is reportedly aiming for an initial public offering (IPO) of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac later this year.

According to The Wall Street Journal, which spoke to sources familiar with the situation, the Trump administration is preparing to sell stock in Fannie and Freddie. Sources told the outlet that the Trump administration believes it could raise roughly $30 billion from the initial stock offering, which they said will kick off later this year.

The Journal reported that some government officials are valuing the GSEs at a combined $500 billion or more, and that they plan to sell off between 5% and 15% of their stock. It remains unknown if a Fannie and Freddie IPO would be offered under one company or two separate entities. 

This would mark a large change for the firms, which have been under federal government control since the housing crisis of 2008. While they are publicly traded companies, most of their stock is owned by the federal government. And despite the plans for an IPO, it remains unclear if the companies will remain under government conservatorship. 

This news comes after President Donald Trump invited the leaders of some of the country’s biggest banks — including JP Morgan Chase CEO Jamie Dimon, Goldman Sachs Group CEO David Solomon and Bank of America CEO Brian Moynihan — to one-on-one meetings late last month about the future of the GSEs.

According to a report by Bloomberg, Trump asked the CEOs “to offer their ideas on the strategy for taking the organizations public and how their banks might play a role.”

While the Trump administration has frequently discussed releasing the GSEs from conservatorship, officials have been careful to say that they want to do it in a safe and sound manner.

Soon after his Senate confirmation in March, Federal Housing Finance Agency Director Bill Pulte tweeted that, “Under President Trump’s leadership of the housing market, Fannie Mae and Freddie Mac have great potential to, safely and soundly, unleash opportunity for more Americans to realize the American Dream.”

In May, Trump posted a message on Truth Social on the topic. “I am giving serious consideration to bringing Fannie Mae and Freddie Mac public.” The message also noted that “Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right. Stay tuned!”

Fannie and Freddie announced their second-quarter earnings in late July, with Fannie reporting net income of $3.3 billion and a net worth of $101.6 billion, while Freddie reported a profit of $2.4 billion and a net worth of $65 billion.