The plan could value the government-controlled mortgage giants at some $500 billion or more and would involve selling between 5% and 15% of their stock with an offering expected to raise about $30 billion. 

No final decision has been made and President Donald Trump is still weighing his options, the official said. The Wall Street Journal earlier reported the news.

Shares of both Fannie Mae and Freddie Mac surged as much as 22% in Friday trading, the most in more than two months. 

The federal government bailed out the companies in September 2008 to stave off catastrophic losses during the financial crisis. Policymakers in Washington have struggled for years with what to do with the so-called government-sponsored enterprises. Congressional efforts to free the companies have repeatedly failed on concerns about the impact on mortgage costs and the firms' commitment to affordable housing. 

Trump has fielded pitches from the chief executive officers of large banks in recent weeks on how to execute the complex maneuver.

The Federal Housing Finance Agency did not immediately respond to a request for comment.