Why I Wrote This Guide
I have been invested in Fannie Mae and Freddie Mac junior preferred shares since 2013. I have written over 300 articles on SeekingAlpha about the conservatorship, published 8 books on the subject, and documented my positions and track record publicly. This guide is what I wish I had when I started.
This is not financial advice. I am telling you what I know from over a decade of deep involvement in this trade.
Understanding the Investment
Fannie Mae is the largest mortgage company in the world. Together with Freddie Mac, they guarantee over $7 trillion in U.S. mortgage debt — roughly half of all American mortgages. They were placed into government conservatorship in September 2008 during the financial crisis.
Since then, Fannie Mae has become enormously profitable. The company generates tens of billions in annual revenue and has paid back far more to Treasury than it received in bailout funds. The total amount swept from the GSEs exceeded $300 billion — against $191 billion in original assistance.
Why do people invest? Because if and when conservatorship ends, shareholders who bought at deeply discounted prices could see enormous returns. Preferred shares trading at a fraction of their $25 or $50 par values could return to par with dividends resuming. The trade is simple in concept but requires understanding the political, legal, and financial dynamics at play.
The Core Thesis
Buy preferred shares at deep discounts to par. Wait for conservatorship to end. Collect the difference when dividends resume and prices normalize. The political alignment in 2026 is the most favorable since 2008.
Common Stock vs. Preferred Stock
Common (FNMA / FMCC)
- Unlimited upside if privatized
- No guaranteed par value
- 79.9% owned by Treasury (dilution risk)
- Higher volatility, higher risk
- More liquid, tighter spreads
- Last in line in any restructuring
Preferred (FNMAS, FNMAT, FMCKJ, etc.)
- Fixed par value ($25 or $50)
- Dividend coupons (4-8%+ at par)
- Priority over common in restructuring
- 26 series of Fannie Mae junior preferred alone
- Lower volatility, more defined outcome
- Deep dive on GSE preferreds →
Why preferred is the play for most investors
Preferred shares have a defined par value and coupon rate. If conservatorship ends and shareholders are treated fairly, you know approximately what you are getting. Common stock has more upside potential but faces massive dilution from Treasury’s 79.9% warrants. For most investors entering this trade, preferred shares offer a better risk-adjusted return.
The 26 Series of Junior Preferred
Fannie Mae issued 26 series of junior preferred stock before conservatorship. Here are some of the most actively traded. Each has a different par value, coupon rate, and trading volume.
| Ticker | Series | Par | Coupon |
|---|---|---|---|
| FNMAS | Series S | $25 | 8.25% |
| FNMAT | Series T | $25 | 8.25% |
| FNMAG | Series G | $25 | Var |
| FNMAH | Series H | $25 | Var |
| FNMAJ | Series J | $50 | Var |
| FNMAK | Series K | $50 | Var |
| FNMAL | Series L | $50 | 5.125% |
| FNMAM | Series M | $50 | 4.75% |
| FNMAN | Series N | $50 | Var |
| FNMAO | Series O | $50 | 7.00% |
| FNMAP | Series P | $50 | 4.50% |
| FNMFN | Series F | $25 | Var |
“Var” = variable/floating rate coupon. This is a partial list — all 26 Fannie Mae series plus Freddie Mac preferred are available on OTC markets. Do your own research on specific series before investing.
Step-by-Step: How to Buy Fannie Mae Stock
Follow these six steps to go from zero to holding GSE shares.
Understand What Fannie Mae Is
Fannie Mae (Federal National Mortgage Association) is a government-sponsored enterprise (GSE) that buys and guarantees mortgages. It was placed into conservatorship by FHFA in September 2008. Fannie Mae and its sibling Freddie Mac guarantee roughly half of all U.S. mortgages — over $7 trillion in mortgage debt. They are profitable, well-capitalized, and many investors believe privatization is imminent.
Decide Between Common and Preferred Shares
Common shares (FNMA, FMCC) trade on the OTC market. Junior preferred shares (FNMAS, FNMAT, FMCKJ, FMCCS, FMCCJ, and dozens more) also trade OTC. Preferred shares have a fixed par value (typically $25 or $50), pay dividends when not in conservatorship, and have priority over common in liquidation. Common shares have unlimited upside but carry more risk in a recap scenario. Most serious GSE investors hold preferred shares.
Open a Brokerage Account That Supports OTC Stocks
Not all brokers allow you to trade OTC securities. Interactive Brokers is the gold standard for serious GSE investors: low commissions, global access, and full OTC support. Fidelity and Charles Schwab also support OTC trading. Robinhood does NOT support most OTC stocks, so avoid it for GSE investing.
Search for the Specific Ticker Symbols
For common stock, search FNMA (Fannie Mae) or FMCC (Freddie Mac). For preferred shares, search the specific series ticker — for example, FNMAS (Series S, $25 par, 8.25% coupon), FNMAT (Series T), FMCKJ (Freddie Mac Series K), or FMCCS (Freddie Mac Series S). There are 26 series of Fannie Mae junior preferred alone. Each has different par values, coupon rates, and trading volumes.
Place Your Order (Use Limit Orders)
OTC stocks trade differently from NYSE/NASDAQ listings. Always use limit orders, never market orders. Spreads can be wide, especially on lower-volume preferred series. Check the bid-ask spread before placing your trade. Start with a small position and add over time as you build conviction. Preferred shares on OTC markets can have illiquid moments — patience is key.
Monitor the Privatization Timeline
The key catalyst for GSE investors is the end of conservatorship. Follow FHFA actions, Treasury Department statements, executive orders, and court rulings. The Third Amendment and Net Worth Sweep are central to understanding the legal backdrop. Stay informed through primary sources, not headlines. The March 2026 executive order on mortgage credit is the latest major catalyst.
Best Brokers for OTC GSE Trading
Fidelity
Solid OTC support, no commissions on OTC stocks. Good customer service. A reliable alternative.
Charles Schwab
Supports OTC trading. Merged with TD Ameritrade. Decent platform, good research tools.
Key Risks to Understand
Conservatorship Continuation
The conservatorship has lasted since 2008. There is no legal requirement for it to end on any timeline. Political winds can shift, and future administrations may have different priorities.
Dilution Risk
Treasury holds warrants for 79.9% of common stock and senior preferred with a massive liquidation preference. Any recap plan must address these claims. Common shareholders face the greatest dilution risk.
Political Risk
GSE privatization is inherently political. Congressional opposition, changes in FHFA leadership, or a shift in Treasury priorities could delay or derail the process. The 2026 political alignment is unusually favorable — but it could change.
Liquidity Risk (OTC Preferred)
Some preferred series trade very thin volume. Wide bid-ask spreads can mean significant slippage. Stick to higher-volume series like FNMAS, FNMAT, and FMCKJ. Always use limit orders.
Binary Outcome
This is largely an all-or-nothing trade. Either shareholders are treated fairly in privatization, or they are not. Position sizing matters enormously. Never invest more than you can afford to lose.
The Bull Case: Why 2026 Is Different
The political, regulatory, and market conditions for GSE recapitalization are the most favorable since conservatorship began in 2008. Here’s why.
Appointed by Trump, Pulte has signaled support for ending conservatorship. As FHFA Director, he has direct authority over the capital requirements and regulatory framework that determine when the GSEs can exit government control.
Has publicly discussed GSE recapitalization as a priority. Treasury holds the senior preferred stock and warrants — Bessent's approach to these claims determines how much value flows to junior preferred and common shareholders.
Has described a potential Fannie/Freddie IPO as 'the largest in history.' Met with NEC Director Kevin Hassett at the White House the same day the mortgage credit executive order was signed. The subtext is not subtle.
The 'Promoting Access to Mortgage Credit' executive order names FHFA directly and directs all federal housing agencies to reduce regulatory burdens — including capital and liquidity requirements, the exact levers that determine conservatorship exit.
The Bottom Line
You have an FHFA Director who wants to end conservatorship, a Treasury Secretary who has discussed recapitalization, a Commerce Secretary pushing for an IPO, and a President who signed an executive order directing FHFA to reduce regulatory burdens. This is the most aligned the stars have ever been for GSE shareholders. Read the full executive order analysis →
Frequently Asked Questions
Is Fannie Mae stock a good investment?
Fannie Mae is a speculative investment tied to the outcome of the conservatorship. If privatization happens and shareholders are treated fairly, preferred shares could return to par value ($25 or $50 per share) with dividends resuming. If the government wipes out shareholders, they could go to zero. This is a binary outcome investment that requires deep research and risk tolerance. The 2026 political alignment is the most favorable since conservatorship began.
What is the difference between FNMA and FNMAS?
FNMA is Fannie Mae common stock. FNMAS is Fannie Mae Series S preferred stock with a $25 par value and 8.25% dividend coupon. Preferred shares have priority over common in any restructuring and have a defined par value, making them a different risk/reward profile than common shares. Most serious GSE investors hold preferred shares for the more defined upside.
Can I buy Fannie Mae stock on Robinhood?
Robinhood has limited OTC stock support. Most GSE preferred shares are not available on Robinhood. Interactive Brokers, Fidelity, and Charles Schwab all support OTC trading and are better choices for GSE investing. Interactive Brokers is the gold standard for serious investors who want access to all 26 series of Fannie Mae preferred.
What are the 26 series of Fannie Mae junior preferred shares?
Fannie Mae issued 26 series of junior preferred stock before being placed into conservatorship. Each series has a different ticker symbol (FNMAS, FNMAT, FNMAG, FNMAH, etc.), par value ($25 or $50), and coupon rate (ranging from approximately 4% to 8.25%). In a recapitalization scenario, these shares could see dividends resume and prices return toward their par values. They all trade on OTC markets.
When will Fannie Mae be privatized?
There is no confirmed date, but the timeline has accelerated significantly in 2026. FHFA Director Bill Pulte supports ending conservatorship, Treasury Secretary Scott Bessent has discussed GSE recapitalization, and Commerce Secretary Howard Lutnick advocates for an IPO. The March 13, 2026 executive order directing FHFA to reduce regulatory burdens is the latest catalyst. Most analysts expect action within 1-3 years, with some expecting movement as early as late 2026.
What happens to preferred stock if Fannie Mae exits conservatorship?
In a privatization scenario, preferred shares would likely be converted or reinstated at or near par value, with back dividends potentially paid. The exact treatment depends on the recapitalization plan. Some proposals have suggested converting preferreds to common, while others preserve their original terms. Preferred shareholders have legal claims that make them harder to wipe out than common shareholders.
What is the Net Worth Sweep and why does it matter?
The Net Worth Sweep was a 2012 amendment that replaced the original 10% dividend with a requirement that Fannie Mae send virtually all profits to Treasury every quarter. This prevented capital building and kept the GSEs in conservatorship indefinitely. The total swept exceeded $300 billion — far more than the $191 billion bailout. The sweep has been partially modified to allow retained earnings, but its legacy remains central to shareholder litigation and the recap debate.
How much money do I need to start investing in Fannie Mae?
There is no minimum investment. Some preferred shares trade under $10, so you can start with a few hundred dollars. However, OTC trading may have minimum commission fees depending on your broker. Interactive Brokers has very low minimums. The important thing is position sizing — this is a speculative investment, so only invest what you can afford to lose entirely.
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Hold the HOLD button. Don't click SELL. Survive the FUD. Glen says it's a done deal — do you believe him?
Fannie Mae & Freddie Mac have paid $301B+ to Treasury — far exceeding the $191B bailout
HOLD button = stay in
SELL buttons = game over
Gold quotes = Glen's wisdom
Release HOLD 3s = panic sell
Preferred Share Defender
Defend your FNMAS & FMCKJ preferred shares. Catch dividend coins, dodge the Net Worth Sweep. The game every Fannie Mae investor needs to play.
Preferred Share Defender
Defend your junior preferred shares (FNMAS, FMCKJ, FNMAT) from the Net Worth Sweep.
Since 2012, junior preferred shareholders have been fighting the Third Amendment that swept all GSE profits to the Treasury. Catch dividend coins, deflect sweeps & government inaction, and protect your junior preferred investment.
Junior preferred shares like FNMAS, FMCKJ, and FNMAT once paid quarterly dividends before the 2012 Net Worth Sweep.
$ Coins = dividends
SWEEP/DEM/DELAY = enemies
Shield deflects sweeps
GLEN = 2X dividends
TIM = clear all enemies
TRUMP = recap shield
BESS = slow enemies
LTNK = coin rush
PULTE = risky clear (70/30)
CALB = 5 auto-deflects
MCKRN = freeze enemies
LUKE = 2X coin value
Disclaimer: Glen Bradford holds Fannie Mae and Freddie Mac junior preferred stock across 26 series and has a direct financial interest in these companies. This page is for informational and educational purposes only. Nothing here constitutes financial, investment, legal, or tax advice. Past performance does not guarantee future results. Do your own research and consult qualified professionals before making any investment decisions. All information is believed to be accurate as of the date of publication but may be subject to change.