Overview

• The Federal Housing Finance Agency is examining options to offer shares in Fannie Mae and Freddie Mac without ending their conservatorship.
• President Trump previously said he was giving serious consideration to full privatization but is now weighing plans that preserve federal guarantees.
• Fannie Mae and Freddie Mac have held about $7 trillion in mortgages since entering conservatorship in 2008, underpinning roughly half of all U.S. single-family home loans.
• Housing analysts warn that privatizing the entities without removing their government backstop could spur a return to risky mortgage securitization and another market collapse.
• Hedge funds such as Bill Ackman’s Pershing Square are positioned to profit from any share offering, having accumulated stakes in both companies over the past decade.