Bill Ackman, CEO of Pershing Square Capital Management LP, center, during the company’s initial public offering (IPO) on the New York Stock Exchange (NYSE) in New York, U.S., Wednesday, April 29, 2026. Michael Nagle | Bloomberg | Getty Images The midterm elections could be a turning point in freeing Fannie Mae and Freddie Mac from government control, according to billionaire investor Bill Ackman. Investors may agree with him, if the rally in both stocks is any sign. The Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac, are each up more than 60% from Oct. 14 through Monday’s close. Both stocks rose about 3% on Tuesday. Ackman, the founder of Pershing Square Capital Management, has long pushed for the two entities to be released from federal conservatorship. “The reason it’s not being played right now is, you know, the midterm elections,” he said in an interview with CNBC’s “Squawk Box.” prices,” he said in his quarterly letter to shareholders, released Monday. Fannie and Freddie buy mortgages from banks and other lenders and then package them into mortgage-backed securities, known as MBS. Their operations are critical to the housing market, providing liquidity to banks and creating a secondary market for MBS. The entities were placed under conservatorship in September 2008, during the financial crisis. The shares were delisted from the New York Stock Exchange in 2010 and have been traded over the counter since then. Ackman wants the conservatorship to end, arguing that the entities would be worth multiples of their current valuation if they were freed from government control. President Donald Trump has supported ending the conservatorship of Fannie and Freddie. But it remains politically and economically controversial. The entities operate under strict capital threshold requirements and would need to be recapitalized, which could occur through the issuance of common equity. of approximately $388 billion in the entities through preferred securities and warrants. Congress may also need to play a role, passing legislation to restructure the government’s role in mortgage financing and mortgage loan guarantees. However, Treasury Secretary Scott Bessent recently said this could happen before Trump’s term ends, saying on 2Way’s “The Morning Meeting” podcast that the administration will address the ownership structure “on.” next year, the year after.” He said affordability will guide the decision. One point of contention is whether ending Fannie and Freddie’s conservatorship would increase MBS spreads over Treasuries, effectively making mortgages more expensive. Bessent has tried to assure the market that wouldn’t happen. “Everything we do will be guided by ensuring that the spread in [agency] “Mortgages…on the Treasury are not increasing,” Bessent said. Ackman argues that privatizing the GSEs would help insulate them from political meddling. “Fannie and Freddie are massive, hugely profitable institutions where any political party that controls them… if they’re still under conservatorship, can influence the outcome of the election,” he told CNBC. In one scenario, he explained, Democrats win the White House, the conservatorship is still in place, and Democrats pressure Fannie and Freddie to lower lending standards to expand homeownership and affordability. “If they are going to move more aggressively toward borrowers with lower credit quality, for example, to achieve a political objective, that will have an impact on trillions of dollars in outstanding mortgage securities,” Ackman said. “It will have an impact on overall credit spreads.” MBS investors want certainty about how the entities will be managed, he said. “We set the rules. During the conservatorship, the president can do anything.”
