Senior executives from Citigroup and Bank of America recently met with former President Donald Trump at the White House to discuss a potential plan to privatize Fannie Mae and Freddie Mac, two of the largest institutions in the U.S. housing market. According to sources familiar with the discussions, Citigroup CEO Jane Fraser and Bank of America CEO Brian Moynihan attended the August 6, 2025 meeting, which focused on strategies for transitioning the government-controlled mortgage giants back into private hands with ongoing government oversight and guarantees.

These consultations are part of what sources describe as a wider effort by the Trump administration to solicit input from major banks regarding what an initial public offering (IPO) for Fannie Mae and Freddie Mac might entail. Such a deal, if realized, would likely rank among the most significant public offerings in U.S. financial history (full coverage).

Fannie Mae and Freddie Mac, created to support the U.S. mortgage market, collectively guarantee over half of all U.S. residential mortgages and are responsible for around 60% of single-family mortgage originations, as well as nearly half of multifamily loans, according to federal data. The two institutions purchase mortgages from lenders and repackage them as securities for investors, a key mechanism for maintaining liquidity in housing finance.

Both firms have been under federal conservatorship since the 2008 financial crisis, during which they recorded massive losses due to mortgage defaults. The U.S. government injected over $100 billion to stabilize them, with the intent to eventually return them to the private sector. In recent years, Fannie Mae and Freddie Mac have rebuilt their capital reserves and repaid government loans. Speculation about a potential exit from government control has caused shares of both companies to spike in over-the-counter trading, and some hedge funds have made significant investments anticipating such an outcome.

At the heart of the ongoing talks are questions about how to value the companies, structure a public share offering, and maintain stability in housing finance. Some advocates of privatization argue that the government’s backstop was always meant as a temporary emergency measure. They believe a well-managed return to the private sector could foster competition and innovation. Proponents further contend that the process could generate billions for the U.S. Treasury that could be used elsewhere in the federal budget.

However, there is significant opposition from civil rights organizations and housing advocates, who warn that removing government control could restrict access to affordable mortgage credit. Critics argue that privatized Fannie Mae and Freddie Mac might tighten lending standards, increase interest rates or guarantee fees, and thereby limit mortgage availability for low- and moderate-income families.

The issue of Fannie and Freddie’s future has confounded policymakers across multiple administrations due to its complexity and far-reaching impact on the broader economy. Analysts caution that any abrupt changes to mortgage finance could have immediate and visible effects for consumers, especially compared to other Trump-era economic policies such as tariffs. For this reason, experts expect a careful and deliberate approach to restructuring these institutions (Reuters coverage).

Whether and how the Trump administration’s efforts to privatize Fannie Mae and Freddie Mac will move forward remains uncertain. Policymakers continue to weigh the significant benefits of increased competition and potential fiscal windfalls against the risks of reducing support for affordable housing and destabilizing a critical pillar of American finance.