The Donald Trump administration is preparing for the initial public offerings (IPOs) of mortgage finance giants Fannie Mae and Freddie Mac this year, reported the Wall Street Journal on Friday.
The plans could value the government-controlled mortgage giants at roughly $500 billion or more combined, the Journal reported.
The share sale would involve selling between 5% and 15% of their stock.
The offering is expected to raise about $30 billion, it added.
After the media report, shares of both Fannie Mae and Freddie Mac climbed 22% on Friday,
The US government bailed out the companies in September 2008 to stave off catastrophic losses during the financial crisis.
Fannie and Freddie were created by the Congress to support the housing market by ensuring affordable mortgage financing, but crumbled after being severely bruised during the financial crisis.
Over the years, efforts to return them to private control have continued, including under Donald Trump’s first term, but have failed to get traction. President Trump has fielded pitches from the chief executive officers of large banks in recent weeks on how to execute the complex maneuver.
The two companies buy mortgages from lenders, holding them in their portfolios or bundling them into mortgage-backed securities for sale.
The cash, lenders receive from these sales, fuels more lending, helping ensure a steady supply of mortgage financing for homebuyers, apartment investors and other multifamily property purchasers.
By converting mortgages into MBS and guaranteeing payment of principal and interest, Fannie and Freddie lure investors into the secondary mortgage market, increasing the funds available for housing.
In May, Trump had said that he would retain an oversight role over the companies even if they went public.
Last year, billionaire investor Bill Ackman, who has held stakes in Fannie and Freddie for more than a decade, said he was counting on Trump to finish the job.