Shares of Fannie Mae (FNMA) and Freddie Mac (FMCC) soared to multi-year highs on Friday after federal agencies outlined plans for their “orderly” exit from government control. The U.S. Treasury and the Federal Housing Finance Agency (FHFA) announced updated agreements aimed at ensuring a smooth transition out of conservatorship.
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The agencies emphasized that public input will be gathered before releasing the mortgage giants, which have been under federal control since the 2008 financial crisis. Fannie and Freddie were initially bailed out with taxpayer money and put in charge of stabilizing the housing market. Nevertheless, they have remained in conservatorship despite multiple privatization efforts, including under former President Trump.
This latest development comes just ahead of Trump’s second term, with the Treasury confirming that it will consult with the President before approving any exit. Interestingly, billionaire investor Bill Ackman recently shared his optimism that the new administration will finally free the firms from conservatorship and potentially pave the way for a public listing as early as 2026. Fannie Mae’s stock jumped 24.5% to $4.28, the highest since 2017, while Freddie Mac rose 23.2% to $4.22—an eight-year high.
Is FMCC or FNMA the Better Stock?
Currently, both FNMA and FMCC stocks have Hold ratings from the lone analyst covering them in the past three months: five-star analyst Bose George. However, George seems to prefer FMCC stock since his price target of $4 implies only 5.3% downside risk versus over 30% for FNMA stock.
