The government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac netted billions in profits last year.
Last week, Fannie Mae reported a net income of $17 billion for the year and $4.1 billion in the final quarter, driven primarily by guaranty fee income, the company reported. Freddie Mac reported net income of $11.9 billion in 2024 and $3.2 billion in the fourth quarter.
Fannie Mae’s net worth reached nearly $95 billion at the end of 2024 while Freddie Mac’s hit $60 billion.
The solid financial performance could add momentum to the idea that Fannie Mae and Freddie Mac should be released from federal control as private companies. The GSEs entered conservatorship in 2008 after being saved from bankruptcy during the financial crisis.
But the outlook on privatizing the GSEs remains murky. Although it is widely assumed that the Trump administration will attempt to release the GSEs, it is not clear what direction that will take.
The GSEs bankroll more than half of the mortgages in the U.S. by purchasing loans from lenders and packaging them into securities, which are then sold to investors.
The Mortgage Bankers Association indicated last week they want the GSEs to exit conservatorship only after the securities have an explicit government guarantee that would ensure investor confidence in mortgage-backed securities and that there would be stability even during market downturns. That would take legislation, however, which could set up a partisan political battle in Congress.
The GSEs could also be released administratively, though that, at best, would leave the securities with “implicit,” but not legally required backing from the government. Some analysts have suggested that an administrative path to privatization also may not be assured in Trump’s second term due to its complexity. The effort could get bogged down and lost among other priorities, such as tax reform and border security.
Wall Street continues to bet on GSE privatization under Trump, however. Fannie Mae’s stock closed at $7.09 on Friday, whereas Freddie Mac’s stock climbed to $6.45. The companies’ stocks were hovering in the $1.10-$1.25 range for most of last year before shooting up following Trump’s victory.
