Former President Donald Trump is reportedly considering a plan to sell the U.S. government’s stakes in mortgage giants Fannie Mae and Freddie Mac, with support from billionaire investor Bill Ackman. The move could reshape the housing finance market and spark a major political and financial debate.
The Potential Plan
According to sources close to the discussions, Trump’s team is exploring the idea of reprivatizing Fannie Mae and Freddie Mac (the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation) by selling the government’s controlling shares. The two entities, which back nearly half of all U.S. mortgages, were placed under government conservatorship during the 2008 financial crisis.
Hedge fund manager Bill Ackman, who has long advocated for their release from federal control, is reportedly advising Trump on the plan. Ackman’s firm, Pershing Square Capital Management, holds significant stakes in both companies and stands to benefit from their privatization.
Why It Matters
- Housing Market Impact – Fannie and Freddie play a crucial role in the U.S. housing market by purchasing mortgages from lenders, providing liquidity, and promoting homeownership. A shift to private ownership could alter mortgage rates and lending standards.
- Investor Windfall – Shareholders, including hedge funds like Ackman’s, could see massive gains if the companies are freed from government control.
- Political Battle – The move would likely face resistance from Democrats and housing advocates who fear privatization could reduce affordability protections.
Challenges Ahead
- Regulatory Hurdles – Any plan would require approval from the Federal Housing Finance Agency (FHFA) and possibly Congress.
- Market Stability Risks – Critics warn that a fully privatized Fannie and Freddie could reintroduce systemic risks seen before the 2008 crash.
- Legal Battles – Previous attempts to recapitalize and release the companies have faced lawsuits from investors and political opposition.
Ackman’s Role
Bill Ackman has been a vocal proponent of ending the conservatorship, arguing that the companies are now financially stable and should operate independently. His involvement suggests that Trump’s team is aligning with Wall Street interests on housing finance reform.
What’s Next?
If Trump wins the 2024 election, this plan could gain momentum. However, it would require careful structuring to avoid market disruption and political backlash. For now, the idea remains speculative—but it signals a potential shake-up in U.S. housing policy under a second Trump administration.
Would you support privatizing Fannie Mae and Freddie Mac? Share your thoughts in the comments.
