Years after the 2008 financial upheaval plunged the Federal National Mortgage Association (FNMA) into government conservatorship, anticipation for a long-awaited departure from this arrangement is mounting. Since President Donald Trump’s inauguration in January 2025, revived discussions on government-sponsored enterprise (GSE) reform have propelled FNMA stock prices skyward, soaring by 225% year-to-date.

Trump has expressed “serious consideration” towards taking Fannie Mae “public.” The surge in optimism appears partly catalyzed by Bill Ackman, CEO of Pershing Square Capital Management, whose thesis speculates that the Trump administration might vigorously pursue FNMA privatization, potentially yielding “multi-bagger” returns for investors, including the federal government. 

Amid these developments, navigating Fannie Mae’s future trajectory demands a careful assessment.

About Fannie Mae Stock

The Federal National Mortgage Association (FNMA), better known to most as Fannie Mae, has long played the role of silent architect in the American housing narrative. 

Created by Congress with a clear mandate to boost liquidity in the mortgage market, this institution has grown into a financial behemoth. Today, it stands as the largest non-bank financial services company in the world, carrying a market cap of $12.5 billion. 

The past 52 weeks have painted a dramatic picture for FNMA. The stock has surged by 567%, catching the attention of investors who had once written it off. The real thunderclap came on May 22, when shares leapt 50.6% in a single trading day. The spike followed the statement by Trump, a plan that could unwind 17 years of federal conservatorship. 

A Closer Look at Fannie Mae’s Q1 Earnings

Fannie Mae opened its books for the first quarter of 2025 on April 30. Net revenues for the quarter landed at $7.1 billion, marking a year-over-year decline and falling short of the $7.6 billion analysts had penciled in. 

The company reported a net income of $3.7 billion, its 29th consecutive quarter of postive earnings. The performance was largely fueled by guaranty fees, though earnings slipped 11.4% from the previous year. By March 31, the company’s net worth climbed to $98.3 billion. 

However, cost pressures began to show, with the efficiency ratio rising to 36.1% from 30.9% a year ago. The uptick reflected heavier administrative expenses. Moreover, fair value gains fell sharply to $123 million from $480 million.

Still, Fannie Mae held its ground in the broader housing market. The company injected $76 billion in liquidity into the single-family and multifamily segments, supporting about 287,000 households with buying, refinancing, or renting homes. By quarter-end, total assets reached $4.35 trillion, backed by a guaranty book of business totaling $4.1 trillion.

What Do Analysts Expect for Fannie Mae Stock?

Privatizing Fannie may seem like a golden ticket for the U.S. government, with the promise of a potential windfall on the horizon. However, analysts have cautioned that this shift might trigger a spike in mortgage rates, a move that could pour fuel on the fire of the nation’s existing housing affordability crisis.

Two analysts have weighed in, and their verdicts signal caution with an overall rating of “Moderate Sell.” One rates the stock a “Moderate Sell,” while the other adopts an even firmer stance with a “Strong Sell.”

The average price target of $2.50 represents potential downside of 74%, while the Street-low target of $1 suggests that the stock can decline as much as 90% from the current price level, ringing alarm bells for investors.