Ackman Advocates Fannie/Freddie Merger as Privatization Push Intensifies

Billionaire investor Bill Ackman recently proposed a merger of the two government-sponsored enterprises (GSEs), Fannie Mae (FNMA) and Freddie Mac (FMCC), arguing it would streamline operations, reduce mortgage rates, and unlock significant synergies. His suggestion comes amidst ongoing efforts by the Trump administration to privatize the entities, further fueling market speculation.

Ackman's bullish view centers on the potential for “large asymmetric upside” should a merger occur. He posits that combining Fannie and Freddie would reduce mortgage rates through streamlined operations and trading synergies.

“A unified entity would simplify government oversight, reduce costs and risks associated with regulatory supervision,” Ackman stated. He believes savings could be passed on to consumers, making homeownership more accessible.

The Trump administration is actively exploring privatization via initial public offerings (IPOs). President Trump reportedly met with CEOs from Citigroup and Bank of America on August 6, 2025, to discuss plans for taking Fannie Mae and Freddie Mac public.

Sources suggest the IPOs could value the combined entities at over $500 billion and raise up to $30 billion. Despite the privatization push, the administration intends to maintain government-backed mortgage guarantees and regulatory oversight.

News of potential privatization has already boosted shares of Fannie Mae and Freddie Mac. The stocks surged over 20% in over-the-counter markets following reports of the administration's plans.

However, significant hurdles remain. Any merger or privatization effort would require substantial federal policy action and faces considerable regulatory and political obstacles. Fannie and Freddie are currently under conservatorship and oversight by the Federal Housing Finance Agency (FHFA) and the Treasury.

FHFA Director Bill Pulte initiated significant changes to the boards of both Fannie Mae and Freddie Mac in March 2025, appointing himself as chairman of both boards and introducing new members, including FHFA General Counsel Clinton Jones.

The future of Fannie Mae and Freddie Mac remains uncertain. While the potential for a merger and privatization has captured the attention of investors, the path forward is fraught with challenges.