The Trump administration plans to sell its stock holdings in Fannie Mae and Freddie Mac through a public offering, aiming to raise $30 billion later this year. The mortgage giants could be valued at $500 billion combined with a 5% to 15% sale of shares, boosting their prices by 18% on Friday.

Debates continue on whether Fannie and Freddie will go public as separate entities or one combined company. Top Wall Street bank chiefs have met with President Trump individually to discuss plans for these mortgage giants. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and FHFA director Bill Pulte have also attended these meetings.

Fannie Mae and Freddie Mac play crucial roles in the US housing market by purchasing mortgages and repackaging them as securities. They were put under government conservatorship during the 2008 financial crisis. Investors rate their mortgage-backed securities as lower risk due to the implicit government guarantee.

There are concerns about fully privatizing Fannie and Freddie, potentially raising mortgage rates for homebuyers. Making the government’s guarantee explicit would require congressional action, which could lower mortgage rates. Proponents argue that the government’s ownership was never meant to be permanent and that selling it could generate billions of dollars.

Prominent Wall Street hedge funds stand to gain from the government relinquishing control of Fannie and Freddie. FHFA Director Pulte believes the opportunities are endless, but the decision ultimately lies with the President. Some investors hoped the first Trump administration would accomplish this, but the process remains complex and incomplete.

Read more at Yahoo Finance: Trump says Fannie and Freddie will go public by end of year and raise $30 billion: Report