Ackman proposes three-step plan for Fannie Mae and Freddie Mac

Bill Ackman has proposed a three-step plan to reform Fannie Mae and Freddie Mac, which emphasizes operational reform rather than an immediate IPO or merger of the two entities.​

Ackman’s Three-Step Plan

• The first step in Ackman’s plan is for the U.S. Treasury to exercise its warrants to acquire up to 79.9% of the common stock in both Fannie Mae and Freddie Mac.​

• The second step involves relisting both institutions on the New York Stock Exchange, rather than pursuing a merger or immediate public offering, which Ackman deems impractical in the current market environment.​

• The third step is to account for and address the senior preferred shares held by the Treasury, ensuring value optimization for taxpayers and stability for mortgage financing.​

Rationale and Impact

• Ackman’s plan is designed to maximize taxpayer value, enhance the operational efficiency and resilience of both mortgage giants, and maintain stable access to affordable mortgage financing for American homeowners.​

• He argues that merging Fannie Mae and Freddie Mac or listing them immediately is not feasible nor desirable now, especially given the need for congressional approval and broader market constraints.​

• By relisting the companies and addressing Treasury’s interests, Ackman aims to secure a robust future for the housing market while avoiding disruption from a rushed IPO or restructuring.​

Ackman’s proposed plan is receiving close attention from policymakers and industry stakeholders as it seeks to create a practical path forward for Fannie Mae and Freddie Mac, balancing reform with stability in the housing finance system.​