When, Not If: Fannie and Freddie's Declaration of Independence

If you're new here: I'm Glen Bradford. I'm long Fannie Mae and Freddie Mac junior preferred shares — most of my net worth, not a side bet — and I've written the full Fanniegate thesis for years. This is analysis and opinion, not investment advice. I hold what I write about.

If you're back: this is the one I've been building toward. The sequencing thesis, the three-men-on-record post, you don't need Congress — all of it pointed here. Let me lay the whole thing out, receipts and all, and then tell you the story I think is lining up. I'm going to lead with the hard parts too, because that's the only way you should trust the easy ones.

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The story I'd tell

On July 4, 2026, the United States turns 250. The administration has wrapped a full year of "Salute to America 250" festivities around it, anchored by a presidential address on the National Mall. Treasury even stood up a platform literally titled "America 250: Ushering in a New Golden Age."

Now hold that next to what's happening in Congress this week, and tell me the story doesn't write itself: a President who calls himself a dealmaker, finishing the biggest piece of unfinished business from the 2008 crisis, and framing it as American companies winning their own independence — freed from the captivity of a conservatorship that was supposed to be temporary and has lasted almost eighteen years.

Let me be completely honest with you, because that's the brand: the administration has not said it will announce anything about Fannie and Freddie on the Fourth of July. I'm not reporting that. I'm telling you the story I'd tell if I were them, and why the pieces are sitting exactly where they'd need to be for it. Take the rest of this post as the case for "when, not if" — and judge the timing for yourself.

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Thirteen months of the same answer

When Trump talks about Fannie and Freddie, the same names keep running the process: Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and FHFA Director Bill Pulte, who chairs both companies' boards. Here's the thing worth sitting with: every one of them has gone on the record, repeatedly, and none of them hedges toward "never." They hedge toward "when."

The President himself:

• May 21, 2025 (Truth Social): "I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public… Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right. Stay tuned!"
• May 27, 2025 (Truth Social): "I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President."
• August 2025: he posted an image of himself ringing the NYSE opening bell for "The Great American Mortgage Corporation," ticker MAGA, dated November 2025. You don't make the meme if you're planning to bury the deal.

Howard Lutnick (Commerce):

• September 11, 2025 (CNBC, via HousingWire): "I think a deal is going to be struck. We're going to take the company public… It could be the largest IPO in history." Timing: "could well be this year… sooner than people think."
• December 3, 2025 (Bloomberg Law): "It is a sooner rather than later story."

Bill Pulte (FHFA, chairs both boards):

• October 23, 2025 (X): "I said as early as late 2025 but could be Q1 or Q2 2026. We shall see! It is up to the President what to do, if ANYTHING!"
• September 2, 2025 (Fox Business): "The President holds all the cards, so he'll decide what to do and when to do it." He's floated a $500–$700 billion valuation.
• January 8, 2026 (CNBC): "We have about 20 to 30 different items that we've presented to the president… Obviously I think the president will, as he said, take executive action, and then I think he'll go to Congress to codify it."

Scott Bessent (Treasury):

• His one consistent guardrail, from February 2025: the metric he watches is whether a release pushes long-term mortgage rates up. His confirmation testimony: "no conservatorship should be indefinite." And May 23, 2025: "Privatization… is a goal for this administration."
• December 17, 2025 (National Mortgage News): "It's not off the table. We're working on it very deliberately."

Three temperaments — Lutnick the salesman, Pulte the operator, Bessent the careful one — and one direction of travel. That's the signal.

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They staffed for this years ago

Here's the bullish argument almost nobody makes, and it doesn't depend on a single quote. Look at who got hired into the seats that control a release.

• Jonathan McKernan is now Treasury's Under Secretary for Domestic Finance (confirmed October 2025). That desk runs Treasury's GSE levers — the senior preferred stock, the warrants, and Treasury's consent over any exit. He came from the FHFA (senior policy counsel) and the FDIC board. The Mortgage Bankers Association's Bob Broeksmit said it plainly on October 8, 2025: "Undersecretary McKernan will play a key role in the future of Fannie Mae and Freddie Mac."
• Luke Pettit is Assistant Secretary of the Treasury for Financial Institutions, and has also served as acting Under Secretary for Domestic Finance. He spent three-plus years as the senior policy advisor to Senator Bill Hagerty — a Republican who has pushed to get these companies back to private markets.
• Pulte spent his first week in office clearing out roughly fourteen GSE board members and installing himself as chairman of both boards. Then he spent a year rebuilding capital and lining up banks.

I want to be straight with you here, because I checked: I can't put a verified, first-person "let's release them" quote in Pettit's or McKernan's mouth, and I'm not going to invent one. The argument is the roster, not the soundbite. You do not staff Treasury's domestic-finance shop with FHFA and Senate Banking alumni, and park a Hagerty lieutenant one desk away, unless ending the conservatorship is on the menu. And remember the structural piece: after Collins v. Yellen (2021), the FHFA director serves at the President's pleasure. The whole chain — White House to FHFA to Treasury — answers to one man now.

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The political runway just cleared

For a year I've argued the same thing: release is not a mechanism problem, it's a sequencing problem. Legally, Treasury and FHFA can end the conservatorship administratively — it does not require an act of Congress. What's been missing is the political moment to fire a cannon the bank lobby has spent years framing as a "bailout."

That moment is the 21st Century ROAD to Housing Act (H.R. 6644) — and it is at the one-yard line:

• The House passed its version 396–13 (May 20, 2026).
• The Senate passed its version 89–10 (March 12, 2026).
• On June 16, 2026, the four corners of housing policy — Tim Scott and Elizabeth Warren on Senate Banking, French Hill and Maxine Waters on House Financial Services — released updated, unified bill text, and the Senate voted 87–8 to proceed.

Tim Scott on the Senate floor: "The age of affordability is now, and the solution to affordability is in fact us."

Here's the part that makes "fast" real. Because the Senate is finishing a bill the House already passed, there is no conference committee. The Senate passes the unified text, the House concurs in a single vote — it can be done under suspension of the rules, in an afternoon, and with 396–13 and 89–10 already on the board, the two-thirds is trivial. The closing move is one clean vote, not a fight.

The honest constraint is the calendar, not the procedure: the Senate leaves June 29 for a two-week recess. So the realistic window to finish before the Fourth runs through about the week of June 22–26. Reporting in mid-June had final votes expected "in the coming days" before the bill heads to the President's desk. Plausible? Very. Locked? No — and I'll tell you when it's signed, not before.

And to be precise, the way I've always been: ROAD to Housing is not a GSE bill. It doesn't touch the conservatorship. It's a housing-supply and affordability package — it even bars big institutional investors from buying up single-family homes. It is the cover, the affordability win banked in hand, not the mechanism. Don't let anyone tell you I said you need Congress to free these companies. You don't. You need a President willing to, and a political environment that rewards it. This bill builds the second thing.

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The flywheel: release is the housing agenda

This is the connection I think the market is missing. The administration isn't treating Fannie and Freddie as separate from affordability — it's wiring them together.

Trump's National Homeownership Month proclamation, signed June 12, 2026, does both in one breath: "I have also directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities to further drive down borrowing costs," and "I call on the Congress to… pass the bipartisan 21st Century ROAD to Housing Act — the most comprehensive and consequential housing legislation in the history of our country."

Now read today's Wall Street Journal (June 18). In a piece on solving the housing shortage, Jim Millstein — co-chair of Guggenheim and the man who was Treasury's chief restructuring officer for the GSEs after 2008 — argues Fannie and Freddie could finance construction loans below market and unlock hundreds of thousands more units a year. The skeptics' objection in that same article is the tell: in a downturn, they say, "the housing agencies — and possibly taxpayers — could be left holding a bad bag if they haven't banked enough reserves."

Read that again. The objection to using the GSEs for the affordability mission is that they might not have enough capital. That is the entire argument for recapitalizing and releasing them. A conservatorship can't safely take on more risk. A well-capitalized, privately-funded Fannie and Freddie, with real reserves and real shareholders, can. Release isn't a detour from the housing agenda — it's what makes the housing agenda durable. And IPO proceeds can seed exactly the kind of programs the WSJ is describing. That's the flywheel.

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The precedent: legislate, then act

People who say "this could take years" haven't looked at how this actually happens. In modern financial crises, Congress builds the vehicle and the executive deploys it in weeks.

The cleanest analog is the GSEs' own history. The Housing and Economic Recovery Act — the law that created FHFA and the conservatorship power — was signed July 30, 2008. FHFA used that power to take Fannie and Freddie into conservatorship on September 6–7, 2008. About five weeks. Hank Paulson's "bazooka" line was July; he fired it by September. TARP was signed in October 2008; the capital injections followed within days.

The pattern is legislate, then act — fast. The ROAD to Housing Act is the legislating. I think the acting follows the same way it always has.

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The reality check (because you should distrust a clean story)

Here's where I lead with the losses. The bull case is real, but so are these, and I'm not cutting them to make the pitch prettier:

Capital isn't "done." At the end of Q1 2026, Fannie had about $112.7B and Freddie about $73.9B in net worth — roughly $186.6B combined. That's in the neighborhood of the standardized single-family capital requirement (~$198B), but the full requirement is larger, and the bigger overhang is Treasury's senior preferred: Fannie's liquidation preference alone was about $230.5B at March 31, 2026, and it climbs every quarter the companies retain earnings. That stake has to be converted, written down, or deemed repaid before common shareholders see daylight. Anyone telling you they're "basically capitalized" is hand-waving.

The talk has cooled, not heated. Be honest about the trend line. In mid-2025 it was "this year." By late 2025 it was "Q1 or Q2 2026." And on June 5, 2026, asked directly, the President said it's still on the table but "not a rush." Pulte's January "decision in the next month or two" didn't materialize. Pulte also picked up a second job as acting Director of National Intelligence, which the bears read as a distraction. The stocks are down sharply on the year.

Even the megabulls say later. Bill Ackman — as long this trade as anyone — argues the right time is late 2026, that an offering needs only ~$30B and shares could reach "$34 a share by the time of an offering in late 2026," and that rushing risks "a failed public offering." KBW called the pre-midterm window "narrowing." TD Cowen's Jaret Seiberg thinks a 2026 IPO now looks unlikely.

So when I say I'd tell the freedom story for the Fourth, hold it against that. "Not a rush" is not "not happening" — Trump keeps every option on the table at all times; those are Pulte's words, not mine. But a disciplined bull names the gap between the vision and the tape. The vision is a capstone deal on the 250th. The tape says deliberate. Both are true today.

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The legal backdrop

One money judgment hangs over any deal. A jury found the government breached shareholders' contractual rights in the net-worth sweep; Judge Lamberth upheld it in March 2025, with the final judgment around $812 million including interest. That's now on appeal at the D.C. Circuit (No. 25-5121), and how it lands shapes the negotiating leverage as a recap gets structured. The Fifth Amendment takings route closed in August 2025 (Fisher at the Federal Circuit), which concentrates the live risk on the breach line. Collins v. Yellen (2021) is the precedent both sides argue. None of this blocks a release; all of it is the weather a release happens in.

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Where I sit

Nothing here changes the trade. The common gets diluted into oblivion — Treasury's warrants for 79.9%, the senior preferred, a fresh equity raise. The junior preferred have the par anchor: a fixed liquidation preference, trading at a discount, sitting in the right seat when the priority of claims matters again in a recapitalization. That's where my net worth is, and that's where it stays.

I've held this through far worse setups than today's. The case has always been simple: the government owns something enormously valuable, the people in charge know it, and eventually they monetize it. Today, all of them are on the record saying so, the bench is staffed to do it, and the political cover is being signed into law this month.

Watch the sequence: Senate passes the unified ROAD text → the House concurs in one vote → the President signs → and then we find out whether the freedom story gets told on the Fourth. Step one is at the one-yard line. I think we're close. I'll tell you the moment it's real.

Focus on the positives. There are a lot of them.

Disclosure: I own Fannie Mae and Freddie Mac junior preferred shares and have been long for years. This is my opinion and analysis, not investment advice. Quotes are attributed to the linked sources; where the record is mixed or a timeline has slipped, I've said so. Do your own work.

Keep reading

• The GSE preferred cheat sheet — the thesis, the risks, and the ticker map in about 60 seconds.
• My actual positions — yes, really, 100% of my net worth in GSE junior preferred.
• The full Fanniegate thesis — ten-plus years, the whole case, in one place.
• The housing bill comes first — why ROAD to Housing clears the runway.
• Trump's three men are all on record — the timeline, principal by principal.
• You don't need Congress to free Fannie and Freddie — sequencing vs. mechanism.