Bruce Berkowitz's Fairholme Capital Management has taken a roughly $500 million preferred equity stake in Fannie Mae and Freddie Mac, CNBC learned Wednesday.
"Taxpayer dollars expended by the government during a time of national crisis will be fully repaid," he wrote in a note sent to CNBC. "And equitable treatment of taxpaying shareholders, including community banks and insurance companies, must be restored.
"The government's ability to fully recoup its investment and restoring value to shareholders are not mutually exclusive. This is the American way."
The mortgage finance provider that was taken into federal receivership with $188 billion in tax funds, turned a profit for the first time since 2006 earlier this year.
(Read More: Fannie Mae: Zombie Stock Turns Cash Cow)
Shares of Fannie Mae traded at $3.18, down 22 percent around 2 p.m. ET. Freddie Mac declined 23 percent, priced at $2.87 per share.
Berkowitz also told CNBC's David Faber that it was time to restructure the mortgage giants.
"The time to restructure Fannie and Freddie is upon us," he wrote. "Sustaining our nation's economic recovery requires it. On behalf of the hundreds of thousands of Fairholme shareholders who helped to rebuild American International Group, Bank of America, CIT Group, General Growth Properties, MBIA Inc., and others after the Great Recession – we stand ready to do our part."
(Read More: Ralph Nader, Wounded Shareholder of Fannie Mae and Freddie
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