Fannie Mae and Freddie Mac each gained more than 60% from Oct. 14 through Monday before rising about 3% on Tuesday, indicating that investors are anticipating an exit from government conservatorship. Investor Bill Ackman, who owns both institutions through Pershing Square Capital Management, believes their valuations could increase tenfold from current levels. Placed under conservatorship in September 2008, the companies have traded over the counter since 2010 and would need to be recapitalized, potentially through common equity issuance, before leaving government control. The Treasury Department, which holds an approximately $388 billion stake, would need to devise an exit plan, while Congress may have to legislate to restructure the government’s role in mortgage financing and home-loan guarantees. Treasury Secretary Scott Bessent said the administration will address the ownership structure in 2026 and 2027, with housing affordability serving as a guiding constraint.
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