Fannie and Freddie Privatization Stalls as Analysts Question Trillion-Dollar Valuation
Trump put a $1T combined valuation on Fannie Mae and Freddie Mac Thursday. Shares spiked sharply before skepticism pulled most gains back by midday Friday.
Fannie rose as much as 10.4% at Friday's open, per Bloomberg. Freddie climbed as much as 9.7% before both surrendered most of those moves.
FHFA Director Bill Pulte went further than Trump, calling the entities potentially worth "trillions of dollars." The two government-sponsored enterprises held combined balance sheet assets surpassing $7T as of 2025, per the same report.
Pulte's Second Role Stalls the Exit Plan
Trump this week appointed Pulte as acting director of national intelligence, a post he holds alongside his FHFA job.
"It already was going to be operationally and politically difficult to end the conservatorships," TD Cowen analyst Jaret Seiberg wrote in a client note, per CNN. He argued that Pulte devoting most of his attention to national security made clearing those obstacles harder to envision.
Susan Wachter, a finance and real estate professor at the Wharton School, told CNN "I think it's a 24/7 operation to bring it private."
Wedbush analyst Michael Piccolo wrote that meaningful IPO action before the 2026 midterms was unlikely, per Bloomberg. He questioned whether Pulte would have the bandwidth for the complex regulatory and capital restructuring work required.
KBW analyst Bose George responded quickly, pegging the "current combined fair value in the $200B to $250B range."
BOK Financial mortgage strategist Christopher Maloney said Friday he didn't believe he'd "ever see Fannie and Freddie released from conservatorship, at least not in my lifetime," per Bloomberg.
He cited the complex legal standing of both entities, a shortage of political capital, and the potential damage to the US mortgage market.
Both stocks have now fallen this year as privatization momentum has slowed, per CNN.
Experts warn that a poorly managed exit could prompt mortgage-backed securities investors to demand higher returns, according to CNN. Those higher costs would pass to homebuyers who already face elevated mortgage rates and near-record home prices.
