The agencies that control mortgage giants Fannie Mae and Freddie Mac set out a roadmap for releasing the pair from government supervision, reinstating the U.S. Treasury’s power to approve any such plan in a bid to keep the process “orderly.”

“The agreement restores Treasury’s previous right to consent to a release of the GSEs from conservatorship,” the Treasury Department and Federal Housing Finance Agency said Thursday in a joint statement. Fannie and Freddie are known as government-sponsored enterprises, or GSEs.

It will “help ensure that the eventual release of the GSEs from conservatorship will be orderly and to reflect certain existing practices,” the agencies said.

The announcement, less than three weeks before Donald Trump is scheduled to be sworn back into office as president, comes just days after hedge fund manager Bill Ackman recommended buying the entities’ common stock, sending prices soaring. He’s among the longtime holders in the entities.

But investors are betting that Trump’s reelection increased the chances of ending the conservatorship. Ackman argued that Fannie and Freddie have improved their capital positions and are poised for strong performance in a challenging housing market.

“Trump likes big deals and this would be the biggest deal in history,” Ackman wrote in a post on X.

As part of the roadmap laid out Thursday, the Treasury also committed to detailing plans for ending the conservatorship, seeking public comment and consulting with the Financial Stability Oversight Council and the U.S. president.

A senior Biden administration official, speaking on condition of anonymity, said the new agreement wouldn’t prevent a future administration from taking action with respect to Fannie and Freddie, but it would set expectations for market participants and for Congress on how an end to the conservatorship might proceed.

Preferred shares

Fannie and Freddie don’t offer mortgages directly to homebuyers, but they underpin the U.S. housing market by purchasing loans and packaging them into securities for sale to investors. The federal government took control of the companies during the 2008 financial crisis, bailing them out to the tune of about $187.5 billion.

In return for its cash injection, the Treasury received senior preferred shares in both Fannie and Freddie.

Thursday’s statement said the new agreement does not affect the GSEs’ capital retention or dividend payments under the senior preferred shares issued to the Treasury.

During the financial crisis, holders of Fannie and Freddie’s preferred shares were hit as the entities stopped paying dividends. Investors have battled over the entities and their future for years.

Releasing the companies would likely entail a lengthy process, with Bloomberg Intelligence analyst Ben Elliott calling a government exit “at best a 2026-27 prospect.”

During the first Trump administration, Mark Calabria, the then-director of the FHFA which oversees the entities, advocated for releasing them, though the effort lost steam as officials confronted the complexity of the undertaking and concerns over disrupting the housing market.

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