Is Washington Finally Ready to Let Go of Fannie and Freddie?

In partnership with

• Free Freddie: The Trump administration has floated plans to privatize Fannie and Freddie, but making it happen will be far more complicated than simply posting about it on social media.

• Windy City windfall: Chicago landlords will pay 46% of property taxes in 2025 after appeals slashed commercial valuations.

• Sharia rules: Dubai Residential REIT’s IPO jumped 14% on day one, signaling strong investor demand for Middle East real estate.

Learn AI in 5 minutes a day

This is the easiest way for a busy person wanting to learn AI in as little time as possible:

1. Sign up for The Rundown AI newsletter

2. They send you 5-minute email updates on the latest AI news and how to use it

3. You learn how to become 2x more productive by leveraging AI

Sign up to start learning.

Editor’s Pick

Is Washington Finally Ready to Let Go of Fannie and Freddie?

A successful sale could be among history's biggest IPOs

After more than 15 years in federal conservatorship, Fannie Mae and Freddie Mac are once again at the center of a political and financial tug-of-war. President Trump ignited market enthusiasm last week with a series of social media posts declaring his intent to take the mortgage giants public.

“Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right,” Trump wrote May 21st on his Truth Social platform. “Stay tuned!”

The posts sent shares of Fannie and Freddie soaring by as much as 38% and 34%, respectively, as investors speculated that the Trump administration could pave the way out of conservatorship. The two government-sponsored enterprises, which back roughly 70 percent of the $12 trillion U.S. home loan market, have been under federal control since the 2008 financial crisis.

In a May 27th Truth Social post, President Trump clarified that the U.S. government would maintain its guarantees and oversight of Fannie Mae and Freddie Mac, even as he pursues taking the mortgage giants public.

Investors have long advocated for their release, which could unlock billions in shareholder value. Strategist Steven Abrahams of Santander Capital Markets projected that a public offering could generate as much as $382 billion, making it among the largest IPOs in history.

Yet the path forward is riddled with complexity. Any public offering would require close coordination between Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Federal Housing Finance Agency (FHFA) Director Bill Pulte, all of whom Trump named as part of his inner circle on the issue. Analysts warn that privatization, especially without careful structuring of government support, could inject volatility into the housing market.

Mortgage-backed securities backed by Fannie and Freddie are considered some of the safest assets in the world, thanks mainly to the assumption of federal support. If that backing is weakened or made ambiguous, investors may demand higher yields, which in turn could lead to higher mortgage rates. Some surveys suggest rates could climb by 0.5 percentage points or more under certain privatization scenarios.

FHFA Director Bill Pulte has emphasized the importance of a careful approach to any effort to release Fannie and Freddie from conservatorship to ensure market stability. Any such plan would also require navigating a web of complex details, including the size and structure of the initial offering and how to handle existing shareholders, whose legacy shares continue to trade and could complicate the path to privatization.

For Trump and allies like hedge fund manager Bill Ackman, the push to privatize Fannie and Freddie is as much a political power play as it is a financial windfall. A successful sale could inject billions into federal coffers, appease deficit hawks in Congress, and deliver a symbolic victory for free-market advocates eager to roll back post-crisis government intervention. But with the stability of the housing market hanging in the balance, the upside comes with high economic stakes.

Overheard

Chicago Landlords Win Big on Tax Appeals—At Homeowners’ Expense

Chicago’s commercial landlords recently scored another victory in their long-running property tax battle. For 2025, they’ll cover 46% of the city’s property tax burden, down from 49% last year, after a wave of appeals slashed valuations on high-value buildings.

Initially, Cook County Assessor Fritz Kaegi’s office had pegged commercial values as outpacing residential, shifting more of the tax load to landlords. The Board of Review later reduced commercial assessments by 17%, while residential values were reduced by just 1%.

The appeals process, long seen as a tool of the well-resourced, likely played its usual role. Nearly all properties valued at over $5 million appealed during the last taxation cycle in 2021, 88% saw reductions. Chicago landlords argue that the tax system is opaque and inconsistent, deterring investment and adding pressure in a slow market with few comparable properties. 

Commercial property owners have fared relatively well despite this, largely due to the appeals process. A recent report from the Cook County Treasurer reveals that from 2021 to 2023, commercial property owners shed $3.3 billion in taxes, while homeowners picked up nearly $2 billion more in taxes.

Middle East Real Estate On Display with Dubai Residential REIT's Successful IPO

Several countries in the Middle East and Arabian Peninsula have experienced sustained economic growth over the past few decades, making real estate in the region increasingly valuable. Yet despite this rising demand, the region has seen relatively few large public REITs. That changed this week with the IPO of Dubai Residential REIT, which surged 14% on its first day of trading—driven by pent-up investor demand.

The REIT holds a diversified portfolio of 35,700 residential units across 21 communities in Dubai, with a gross asset value of approximately $5.9 billion. It is a Shariah-compliant, income-generating, closed-ended real estate investment fund managed by DHAM REIT Management LLC. Notably, it's also Dubai’s first IPO of the year.

The REIT’s early success highlights investor appetite for exposure to the region’s rapid growth. Dubai is among the fastest-growing economies globally and ranks as the 18th wealthiest city by millionaire population. While the Middle East has not historically been known for public real estate offerings, this IPO could pave the way for more to come.

Are You Enjoying This Newsletter?

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

📧 Forward it to a friend and suggest they check it out.

🔗 Share a link to this post on social media.

🗣 Have ideas for future topics (or just want to say hello)? Share your feedback and tips at [email protected] or connect with us on X through @propmodo.

✅ Not subscribed yet? Sign up for this newsletter here.

📫️ Please add our newsletter email, [email protected], to your contacts to make sure you don’t miss any updates.

Enjoy reading about trends and innovation in commercial real estate? Subscribe to Propmodo.com for unrestricted access to reliable, data-driven journalism and exclusive insights available only to subscribers.