President Trump said the federal government will retain its guarantees for and oversight of Fannie Mae and Freddie Mac, even as he seeks a public offering for the mortgage giants.
“I am working on taking these amazing companies public, but I want to be clear, the U.S. Government will keep its implicit guarantees and I will stay strong in my position on overseeing them as president,” Mr. Trump posted late Tuesday on Truth Social.
The companies, which play a key role in the U.S. housing market by buying mortgages and repackaging them to investors, have been under the conservatorship of the Treasury Department since the 2008 financial crisis. Fannie Mae and Freddie Mac have since returned to steady profitability.
Shares of both surged last week after Mr. Trump announced he was considering a public offering.
Since the two entities returned to profitability, investors have called for the government to release them from the Treasury Department’s conservatorship, which could be a windfall for shareholders and the government.
However, critics have argued that taking the entities public would be risky because it could remove the government guarantee that Fannie Mae and Freddie Mac still have. That government guarantee ensures that their bonds are among the safest investments, bolstering the market for their mortgage-backed securities.
Bill Plute, head of the Federal Housing Finance Agency that oversees Freddie Fannie, said in February that removing the government control of the entities must be “carefully planned” to ensure the housing market remains safe and doesn’t increase mortgage rates.
Mr. Trump’s post appears to soothe those concerns about plans to privatize the two entities. Mr. Trump said last week he’s working to take the entities public, a move that was cheered by Trump ally and noted Wall Street investor Bill Ackman.
“Fannie Mae and Freddie Mac are doing very well, throwing off a lot of Cash and the time would seem to be right,” Mr. Trump said last week, which sparked a double-digit rally in shares of both entities, which trade over the country rather than on a major stock exchange.
Mr. Ackman’s Pershing Square Capital Management invested in Fannie and Freddie over a decade ago and is now the biggest private holder of Fannie Mae with more than 115 million shares, which is worth over $1.2 billion.
Since Mr. Trump was reelected last year, Mr. Ackman has publicly pushed to end the federal control of Fannie and Freddie, calling it a good deal for taxpayers that could generate as much as $300 billion.
“Trump likes big deals and this would be the biggest deal in history. I am confident he will get it done,” Mr. Ackman posted on X in December.
