The common shares are more risky but also appear to have more potential for investors, based on a very low valuation to operating earnings.
Background
Fannie and Freddie, known as the government-sponsored enterprises, or GSEs, together hold roughly $5.2 trillion in mortgage loans and mortgage-backed securities, and remain crucial to the U.S housing market, as they purchase about 90% of newly originated mortgage loans in the United States.
The two companies were taken under government conservatorship at the height of the financial crisis in 2008.