Fannie Mae and Freddie Mac continue to build their net worths as they move toward a public offering that probably won’t happen until next year, according to Bill Pulte, the head of the mortgage giants’ federal regulator and chair of both companies’ boards.
The mortgage giants have a combined net worth of $173 billion as of Sept. 30, after Fannie Mae posted a $3.9 billion third-quarter profit on Wednesday and Freddie Mac reported $2.8 billion in Q3 net earnings on Thursday.
With Fannie Mae CEO Priscilla Almodovar ousted from her job last week, Chief Financial Officer Chryssa Halley handled the company’s earnings call on Wednesday. Chief Operating Officer Peter Akwaboah is serving as Fannie Mae’s CEO on an interim basis.
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Freddie Mac also has an interim CEO, President Mike Hutchins, who has served in that role since Pulte fired Freddie Mac CEO Diana Reid in March. Freddie Mac CFO Jim Whitlinger handled the company’s earnings call on Thursday.
Chryssa Halley
“Despite continued affordability headwinds and buyer caution in the housing market, we provided $109 billion of liquidity to the mortgage market,” Halley said on Fannie’s earnings call. “This helped over 400,000 households, including 207,000 homebuyers, about half of whom were first-time homebuyers. We also helped to keep over 23,000 households in their homes by offering various forms of assistance.”
So far this year, Fannie Mae has provided $287 billion of liquidity to the mortgage market and helped 1.1 million households buy, refinance or rent a home, Halley said.
Fannie Mae disclosed Wednesday that the head of its single-family division, Malloy Evans, left the company last week under an agreement that pays him two years of base salary totalling $1.2 million and one year of health coverage.
Purchase mortgage guarantees 2018-2025
Freddie Mac overtook Fannie Mae last year in purchase mortgage guarantee volume, a trend that continues this year. Source: Fannie Mae and Freddie Mac investor disclosures.
Fannie and Freddie don’t make mortgage loans themselves, but help make rates more affordable by providing guarantees to investors in mortgage-backed securities who fund most home loans.
While Fannie Mae has traditionally been the bigger sibling when it comes to purchase mortgage guarantees, Freddie Mac overtook its sister last year, backing $286 billion in purchase loans to Fannie Mae’s $270 billion.
The trend continues this year, with Freddie Mac’s $219 billion in purchase mortgages backed through Sept. 30 besting Fannie Mae’s $186 billion in support for homebuyers by 18 percent.
Jim Whitlinger
Freddie Mac helped 483,000 households buy, refinance or rent a home in Q3, Whitlinger said, and 50 percent of homebuyers purchasing primary residences were first-time homebuyers.
“That’s the American dream, and our work helps make it true for more than 1,000 families every day,” Whitlinger said.
Fannie, Freddie net worth hits $173B
Source: Fannie Mae and Freddie Mac investor disclosures.
At $67.6 billion, Freddie Mac’s net worth is only 64 percent of Fannie Mae’s $105.5 trillion, but Freddie’s net worth is growing faster. Last year, Freddie’s net worth grew by 25 percent and Fannie’s by 22 percent. So far this year, Freddie has grown by 13 percent and Fannie by 11 percent.
Fannie and Freddie have been profitable for nearly 8 years. But the long-standing dreams of small government conservative to privatize the companies have been cast aside by the Trump administration, which plans to monetize at least part of the 80 percent stake the government has held in the companies since they were placed in conservatorship in 2008.
Appearing on Patrick Bet-David’s PBD Podcast on Wednesday, Pulte said the Trump administration is looking to sell about 5 percent of both companies’ shares, raising $25 to $30 billion in cash as early as December but more likely in the second quarter of 2026.
Pulte said Trump is “entertaining a variety of options” but that it’s likely to be a traditional offering, in the sense that there will be an investor prospectus issued in advance.
“I think these businesses could be worth trillions one day,” Pulte said.
“I think it will be a very, very hot over subscribed IPO,” Pulte said. “You have every bank coming into the White House” wanting to handle the offering, which has the potential to be the “biggest IPO in history.”
“I mean, they all want to come in, but we’ve had about six meetings with six different banks, all the big ones,” Pulte said. “They’re sitting right there in front of the resolute desk, and they’re pitching the president.”
“Some of these guys, you know, they weren’t so friendly to the President” between his first and second terms, Pulte said. Now, “they kiss his ass, and they deserve to kiss his ass.”
For the real estate and mortgage industries, it remains to be seen how the new course the Trump administration has set for Fannie and Freddie will impact homebuyers.
Keeping Fannie and Freddie in conservatorship will give the government tight control over the companies’ business, including the guarantee fees they charge lenders, which impact mortgage rates paid by borrowers. If the Trump administration wants to lower those fees, that could take pressure off of mortgage rates down — but dent the profits of Fannie and Freddie’s shareholders, and the value of the government’s stake in the companies.
President Trump’s promise that the government will continue to maintain an “implicit guarantee” of Fannie and Freddie’s obligations could also help keep mortgage rates low, but expose taxpayers to future losses incurred by the mortgage giants.
Fannie and Freddie’s regulator, the Federal Housing Finance Agency (FHFA), has put deregulation and combating fraud at the forefront of its strategic plan for the mortgage giants over the next five years.
Trump and Pulte, who heads the FHFA, have also said they plan to use Fannie and Freddie’s leverage to put pressure on homebuilders to build homes faster and cheaper.
Other areas Fannie and Freddie are looking at to address affordability include mortgage insurance, credit scoring, title insurance, and allowing crypto assets to count when qualifying for a mortgage, Pulte said.
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