Bill Ackman Calls for Merging Fannie Mae, Freddie Mac Amid Trump’s IPO Push

The president had suggested taking the two companies public back in May.

Bill Ackman, founder and CEO of Pershing Square Capital Management, attends the Milken Conference 2025 in Beverly Hills, Calif., on May 6, 2025. REUTERS/Mike Blake

Merging mortgage giants Fannie Mae and Freddie Mac could turn out to be highly beneficial in terms of lower mortgage rates for Americans while lowering costs for the federal government, hedge fund manager Bill Ackman said in an Aug. 10 X post.

“A merger would enable them to achieve huge synergies both in their operations and in the trading price and spreads of their MBS, savings which could be passed along to consumers in the form of reduced mortgage rates,” Ackman said. MBS refers to mortgage-backed securities, which are investments in home loans and other real estate debt.

“A merger would also reduce the cost and risks of government oversight as there would be only one institution that would require FHFA oversight,” he added, referring to the Federal Housing Finance Agency, which currently regulates Freddie Mac and Fannie Mae.

Ackman’s comments follow confirmation from a senior Trump administration official on Aug. 8 that the government is seeking to take the two companies public later this year, launching an initial public offering of shares in both Freddie Mac and Fannie Mae.

In May, President Donald Trump announced he would discuss the matter of taking the entities public with FHFA director William J. Pulte, Treasury Secretary Scott Bessent, and Commerce Secretary Howard Lutnick before deciding on the issue.

In an Aug. 10 post on Truth Social, Trump posted a picture of himself at the New York Stock Exchange, with the words “The Great American Mortgage Corporation” listed on the side. On the same day, Pulte made an X post using the same words.

Freddie Mae and Fannie Mae are entities that buy mortgages from lenders, either holding them in their portfolio or selling them as mortgage-backed securities.

By engaging in such activity, the entities provide liquidity and stability to the U.S. housing market. While Fannie Mae purchases mortgages from major commercial banking institutions, Freddie Mac buys from Savings and Loan Associations.

As to market risks posed by creating a monopoly formed by the merger, Ackman said in another Aug. 10 X post that more competition actually increases risk when it comes to institutions like Freddie Mac and Fannie Mae, which are “systemically important.”

“These are monoline insurers of first mortgages made to creditworthy middle class borrowers. Innovation in this space is what caused the financial crisis,” he wrote, referring to the 2008 financial crisis.

Government Oversight

Before the 2008 financial crisis, Freddie Mac and Fannie Mae were private companies backed by the Department of the Treasury. Declining home prices and increasing mortgage delinquencies put the companies at risk of collapse.

The entities were put under government conservatorship in 2008 to prevent them from going bankrupt.

Democrats have pushed back against proposals to take Freddie Mac or Fannie Mae public, writing a letter to Pulte on June 5, raising their concerns.

Currently, homeownership is difficult for many Americans due to high mortgage rates and home prices, they wrote.

But even in this tough environment, government-backed mortgage financing through Freddie Mac and Fannie Mae “remains one of the lowest cost sources of lending for homeowners and multifamily housing developers alike by providing liquidity to the mortgage market,” the lawmakers said.

Taking the companies public could result in these entities prioritizing investor profits over homes for Americans, they said.

“Should President Trump make good on his plans, he may take us back to the status quo before the 2008 foreclosure crisis, when the Enterprises’ investors enjoyed the full profits that come with privatization while knowing taxpayers would be on the hook for any future failures,” they wrote.

In a May 28 Truth Social post, Trump said that even if the federal government relinquishes control of the entities by taking them public, it will still maintain oversight of the companies.

“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,” he wrote.