Fannie Mae, Freddie Mac may sell shares to investors in 2025

Commerce Secretary Howard Lutnick on Thursday opened the door to allowing investors to buy shares in government-owned housing giants by the end of the year.

“Do I think it’s going to be soon? I do,” Lutnick said on CNBC, adding it “could well” be in 2025.

He stressed that the goal was to ensure home prices remain affordable for families. “I think a deal is going to be struck. We’re going to take the company public,” he said. “It could be the largest IPO in history. But only a small percentage of these companies and we’ll show the American taxpayers these are assets they didn’t think they owned.”

Fannie Mae and Freddie Mac are both government-supervised mortgage firms with an enormous footprint in the U.S. housing market. Both have been under federal control since the 2008 financial crisis after the companies snapped up toxic loans in a booming housing market that soon went bust.

Fannie and Freddie don’t issue home loans. Instead, they purchase mortgages from lenders, bundle them into securities and sell them to investors with a federal guarantee against default.

Last week, Federal Housing Finance Agency Director Bill Pulte said the administration was weighing the decision to allow shareholders to purchase limited shares in the company through a $30 billion IPO. The U.S. government would still keep a stake in the company, he said.

“We’re in no rush,” Pulte told Fox Business. “The president holds all the cards, so he’ll decide what to do and when to do it. I think we’re looking at about 5%.”

The Financial Times reported this week that the FHFA had rehired some previously fired employees as it prepares for a possible Fannie and Freddie public offering.