Fannie Mae Shares Surge on Accelerated Privatization Timeline

Fannie Mae's stock closed the most recent trading session with significant gains, driven by an accelerated timeline for its exit from government conservatorship and concrete operational moves positioning the company for a potential public offering. Market focus remains squarely on the legal and financial mechanics of how the U.S. government will unwind its control.

In a strategic operational realignment, Fannie Mae announced on December 11 that it will relocate its San Francisco office to Birmingham, Alabama. The decision, publicly endorsed by Senator Tommy Tuberville and FHFA Director William Pulte, is viewed as a cost-cutting measure designed to establish a more favorable operational cost base. Investors have responded positively to these efficiency initiatives, seeing them as crucial steps toward building a sustainable, standalone cost structure ahead of a future IPO.

A Clearer Path Out of Conservatorship

The momentum toward privatization has intensified since William Pulte assumed leadership of the Federal Housing Finance Agency (FHFA) in March 2025. Recent reports indicate the administration is targeting a potential public offering as early as late 2026. Analysts at Bloomberg Intelligence caution that the path remains complex, particularly regarding the treatment of the U.S. Treasury's senior preferred shares.

Concurrently, the cap for multifamily loan purchases for 2026 has been raised substantially—from $73 billion to $88 billion. This signals ongoing political support for the company's growth even as the conservatorship exit is prepared. The market interprets these steps as tangible preparations for recapitalization, fueling a rally that has lifted the share price from single-digit levels at the start of the year to above $11.

Valuation and Key Metrics

The recent rally has substantially altered Fannie Mae's market valuation.

Should investors sell immediately? Or is it worth buying Fannie Mae?

• Current Share Price: $11.16 (up $0.45)
• Outstanding Common Shares: Approximately 1.16 billion
• Common Stock Market Capitalization: Roughly $12.8 billion
• Estimated Enterprise Value (including preferred stock): >$100 billion
• 2026 Multifamily Loan Purchase Cap: $88 billion
• Next Quarterly Report: February 2026

The higher share price reflects the institution's scale, marking a decisive break from valuations below $1 billion during the depths of conservatorship. The enterprise value climbs significantly higher when subordinate and senior preferred shares are included; the resolution of these instruments is a central negotiation point for privatization.

On the management side, Executive Vice President Jacob Williamson recently reported ownership of 647 common shares via a Form 3 filing. While the volume is modest, it aligns with the shift toward a future shareholder structure outside of government control.

Regulatory Backdrop and Macroeconomic Support

The leadership framework for the U.S. housing finance system has been further solidified. The Senate confirmed Joe Gormley as President of Ginnie Mae and Frank Cassidy as FHA Commissioner yesterday, completing the personnel needed to advance the administration's housing policy agenda.

Macroeconomic conditions are providing a tailwind. Mortgage rates are currently hovering around 6.21%, and economists at Fannie Mae project they could dip below 6% by the end of 2026. Such a decline would likely stimulate refinancing activity, thereby boosting earnings from guarantee fees.

Critical Factors for Future Performance

The future trajectory of Fannie Mae's stock is heavily dependent on the structure of the government's exit from conservatorship. The clearly stated privatization intent—often referred to by market participants as the "Pulte Put"—is seen by many as having established a solid floor for the share price. However, the long-term value potential will ultimately be leveraged by the terms governing the resolution of the U.S. Treasury's warrants and preferred stock holdings.