Fannie Mae and Freddie Mac may sound like funny names, but there’s nothing silly about the pivotal role they play in the U.S. housing market. The two government-sponsored enterprises have been operating under federal conservatorship for nearly two decades in the aftermath of the 2008 housing bubble and crash. But now President Donald Trump’s administration is reportedly considering a public offering that would allow investors to buy a 5% stake.
The two companies play similar roles, with Fannie Mae historically buying from large commercial banks and Freddie Mac working with smaller lenders and credit unions. The stocks for both companies are up big in the last year. While it’s unclear how a shift toward privatization could happen or when the offering would occur, it’s time for investors to start considering if they should buy Freddie Mac or Fannie Mae stock.
