When will Fannie Mae officially announce an IPO?

FHFA Director Sandra L. Thompson recently modified the Enterprise Regulatory Capital Framework. On May 30, 2024, Director Thompson announced a final rule, effective July 1, 2024, which adjusted the Enterprise Regulatory Capital Framework (ERCF) ^{[^]}, ^{[^]}. These changes included reducing capital requirements for Fannie Mae’s and Freddie Mac’s investments in eligible multifamily housing, single-family affordable housing, and small business loans, as well as other investments promoting safety and soundness. The rule also refined credit, operational, and market risk capital requirements and relaxed requirements for mortgage servicing assets ^{[^]}, ^{[^]}. Thompson stated that these modifications aim to ensure the Enterprises can fulfill their mission while operating safely and soundly, and to prepare them for the eventual end of conservatorship ^{[^]}, ^{[^]}.

FHFA’s actions align with Donald Trump’s goal of GSE privatization. These adjustments by the FHFA align with the housing policy goals of Donald Trump and his allies, who have prominently advocated for the privatization of Fannie Mae and Freddie Mac ^{[^]}, ^{[^]}. Reports indicate that Trump allies are actively developing plans to transition the Government-Sponsored Enterprises (GSEs) out of government control ^{[^]}, ^{[^]}. Director Thompson’s recent adjustments, particularly the reduction in capital requirements for mission-aligned activities and her stated objective of preparing the GSEs for an end to conservatorship, could facilitate a future transition towards a more market-based operation, which is consistent with fostering private sector involvement in the housing finance market ^{[^]}, ^{[^]}, ^{[^]}, ^{[^]}.

Fannie Mae's capital significantly increased by late 2025. The company's Common Equity Tier 1 (CET1) capital reached $115.5 billion as of December 31, 2025, according to its Form 10-K ^{[^]}. This figure indicates growth from the $112.8 billion in CET1 capital reported for September 30, 2025, demonstrating ongoing capital accumulation under conservatorship ^{[^]}, ^{[^]}.

Fannie Mae expects full capital rule compliance by 2027. Based on its current financial performance and retained earnings, the company projects achieving full compliance with the final capital rule by the third quarter of 2027 (Q3 2027) ^{[^]}. This timeline is consistent with expectations outlined in the FHFA's '2025 Conservatorship Scorecard' for Fannie Mae, which monitors progress toward meeting the Enterprise Capital Rule requirements ^{[^]}, ^{[^]}. Continued profitability and the retention of earnings are crucial for supporting this projected compliance date.

Oral arguments in a major shareholder lawsuit challenging the government's conservatorship of Fannie Mae and Freddie Mac are scheduled for April 10, 2024. This critical hearing will take place at the D.C. Circuit Court of Appeals ^{[^]}. The consolidated appeal, officially titled "In re: Fannie Mae/Freddie Mac Senior Preferred Stock" (case 25-5121), incorporates several prominent cases, including Fairholme Funds, Inc. v. Federal Housing Finance Agency ^{[^]}. The appeal seeks to overturn a July 2023 district court ruling that affirmed the legality of the "net worth sweep" provision within the Preferred Stock Purchase Agreements (PSPAs) ^{[^]}.

The lawsuit specifically contests the legality of the "net worth sweep." Shareholders argue that this provision unlawfully stripped them of profits [^] . Conversely, the Federal Housing Finance Agency (FHFA) maintains that it acted fully within its broad conservator powers when implementing the net worth sweep ^{[^]}.

A favorable ruling could compel PSPA renegotiation and enable an IPO. A decision by the D.C. Circuit Court of Appeals in favor of the shareholders could significantly impact the PSPA, potentially compelling the U.S. Treasury to renegotiate the agreement's terms ^{[^]}. Such a renegotiation might remove the "net worth sweep" and other existing barriers, allowing Fannie Mae to retain its earnings and eventually proceed with an Initial Public Offering (IPO) ^{[^]}.

Several members of Congress oppose a near-term GSE exit, citing affordability risks. A group of 12 Democratic Senators, including members of the Senate Banking Committee and Senate Majority Leader Chuck Schumer, articulated "serious concerns regarding plans to reprivatize Fannie Mae and Freddie Mac." They urged a pause to fully assess the potential impacts on housing affordability ^{[^]}. Additionally, on the House side, Ranking Member Maxine Waters of the House Financial Services Committee has criticized the current FHFA Director, attributing aspects of the affordable housing crisis to their leadership and indirectly opposing policies that could escalate housing costs ^{[^]}.

The Mortgage Bankers Association actively lobbies on GSE reform, spending millions. The association's total lobbying expenditures for 2023 amounted to $3,520,000, with an additional $1,730,000 reported for the first two quarters of 2024 ^{[^]}. 'GSE reform' is specifically identified as one of the issues on which the Mortgage Bankers Association has lobbied, indicating their advocacy for policies that support a stable, liquid, and efficient secondary mortgage market ^{[^]}.

FHFA appointed Houlihan Lokey as financial advisor for GSEs. The Federal Housing Finance Agency (FHFA) officially announced the selection of Houlihan Lokey Capital, Inc. as its financial advisor on July 13, 2023. This appointment represents a necessary administrative step toward a potential public offering for Fannie Mae and Freddie Mac. Houlihan Lokey's primary mandate involves assisting the FHFA in developing a comprehensive strategy to conclude the conservatorship of these government-sponsored enterprises (GSEs), including evaluating various public offering options ^{[^]}.

GSE public offering expected by 2026, requiring Treasury coordination. FHFA Director Sandra L. Thompson has indicated that an initial public offering (IPO) for Fannie Mae and Freddie Mac is "very likely" in 2026 ^{[^]}. Any full recapitalization and release from conservatorship, including the execution of a public offering, would necessitate coordination and agreement with the U.S. Department of the Treasury ^{[^]}.

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