On Saturday, President Donald Trump shared an AI-generated image on Truth Social showing himself at the New York Stock Exchange with the phrases “MAGA LISTED NYSE” and “The Great American Mortgage Corporation,” dated November 2025.
The post appeared to reference a Wall Street Journal report from Friday outlining Trump’s plan to make a stock offering of Fannie Mae and Freddie Mac — valuing the government-sponsored enterprises (GSEs) at a combined $500 billion — and hinted at a possible merger of the two.
The idea of combining the mortgage giants has divided analysts. Supporters say it could streamline operations, cut costs and lower mortgage rates. Meanwhile, critics warn that maintaining separate entities preserves competition in the housing finance market.
Billionaire investor Bill Ackman, founder of Pershing Square Capital Management, voiced support for the merger in a post on X on Sunday. Ackman, who holds 210 million shares in the two companies, including 10% in preferred shares, stated that merging the GSEs could lower mortgage rates.
“A merger would enable them to achieve huge synergies both in their operations and in the trading price and spreads of their MBS (mortgage-backed securities), savings which could be passed along to consumers in the form of reduced mortgage,” Ackman wrote. Earlier this year, he floated a plan to privatize the GSEs and lift their share prices into the $30 range without raising mortgage costs.
As of Monday morning, the 30-year mortgage rate for conforming loans stands at 6.80%, according to HousingWire’s Mortgage Rates Center. Rates, which hovered near 7% for much of the year, have declined amid expectations of a Federal Reserve rate cut in September.
The rationale behind merging the GSEs
In another post on X, Ackman shared an April article by Clifford Rossi, academic director of the Smith Enterprise Risk Consortium at the University of Maryland and former GSE executive, who argued that while privatizing Fannie and Freddie would be difficult, merging them could bring significant benefits.
Rossi wrote that Fannie was created during the Great Depression to serve commercial banks, while Freddie emerged decades later to cater to thrifts. Freddie was spun off during the 1980s savings and loan crisis to introduce competition.
But in the years before the Great Financial Crisis, large originators “played one GSE off the other” to push down guarantee fees — fueling a “race to the bottom” that contributed to their collapse.
“A post-conservatorship environment with two nearly identical companies vying for the same mortgages invites another risk-driven event in the future,” Rossi warned. “It’s simply a matter of time when you have no other mechanism to compete on but price and credit risk.”
He also pointed to operational overlap: the two GSEs together employ about 15,000 people, with 2024 general and administrative costs totaling $6.5 billion.
‘The inefficiency of monopolies’
Rob Zimmer, director of external affairs at the Community Home Lenders of America (CHLA), countered that any savings from a merger “would be more than offset by the inefficiency of monopolies” and said there’s no evidence it would lower rates.
“CHLA small community lenders don’t like monopolies in general,” Zimmer said. “They want more choices in the market.”
Zimmer, who led congressional relations at Freddie from 2001 to 2009, argued the real problem before the crisis was that the GSEs “modeled themselves as growth stocks,” taking on riskier products to boost share prices. Instead, CHLA supports converting the enterprises into utility companies — steady, dividend-paying entities with no mandate to chase growth.
A short — and optimistic — timeline
According to reports, the Trump administration is weighing an initial public offering for Fannie and Freddie, valuing the two companies at a combined $500 billion. Officials, speaking on condition of anonymity, said no decision had been made on whether to hold one stock offering or two, but the initial goal would be to raise roughly $30 billion
Analysts on Friday questioned whether such a massive transaction could be completed by ear-end — especially if the plan involves merging the offerings.
“It doesn’t make sense,” said Bose George, an analyst at Keefe, Bruyette & Woods (KBW). “The charter is for two separate companies, and the charter can only be changed by Congress. So, there’s zero chance of that happening by the end of the year.”
CHLA’s Rob Zimmer noted that the GSEs have two separate statutes — similar but distinct — making it a “congressional call.” Even if lawmakers agreed, he added, such decisions are not made quickly.
“Obviously, the conservator has wide-ranging powers; the administration could do what it wants here and wait for someone to challenge it,” Zimmer said. “But if they are trying to sell stock in the short run, the last thing they need is to have companies in legal limbo.”
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