The complex process of taking Fannie Mae and Freddie Mac public is getting yet another wrinkle.
Federal Housing Finance Agency director Bill Pulte said the mortgage giants were exploring avenues to pursue equity stakes in technology firms, Bloomberg reported. Pulte, speaking from a housing conference hosted by news and research outlet ResiClub, claimed technology companies were offering equity in exchange for partnerships.
“We’re looking at taking equity stakes in companies that are willing to give it to us because of how much power Fannie and Freddie have over the whole ecosystem,” Pulte told ResiClub.
Pulte added that he was hoping the companies under government conservatorship would behave more like businesses. Even still, he said he expects them to remain under conservatorship, even as an initial public offering looms in the distance.
The administration is looking to sell shares in the two government-backed mortgage giants — under their federal conservatorship since a 2008 bailout — at a valuation that could reach $500 billion and raise about $30 billion.
It’s in line to be one of the largest public offerings ever and banks are lining up to get a piece of the action. The deal could bring a windfall for the federal government, which holds warrants for roughly 80 percent of both firms’ common stock.
But it’s a delicate process. Fannie and Freddie underpin almost half of all U.S. mortgages, so any mistake could ripple through housing markets and consumer borrowing.
Pulte previously placed the administration’s goal of launching the IPO by the end of the year. In his most recent comments, he said it could still come in this quarter, but could also arrive early next year.
Last month, Priscilla Almodovar, Fannie’s chief executive officer and president, resigned from her post atop the organization as part of a broader shakeup. Chief Operating Officer Peter Akwaboah assumed the top position in an interim capacity.
— Holden Walter-Warner
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