It lost money for a few years after the crash, but is once again profitable.Īs with Fannie Mae, Freddie Mac purchases conventional home loans, bundles these loans together, and then sells them to investors as mortgage-backed securities in the open market. It was taken into conservatorship by the government as a result of the 2008 housing crisis, where it remains as of today. Congress through the Emergency Home Finance Act of 1970. It was established as a chartered private enterprise by the U.S. Once Fannie Mae buys mortgages from lenders, it either holds these mortgages in their portfolio or packages them into mortgage-backed securities that they sell in the open market.įreddie Mac is the other government-sponsored home loan organization. Money is then freed up for these lenders to grant home loans to more consumers. Today, it remains in conservatorship, but it is once again profitable.įannie Mae helps to provide liquidity to the mortgage loan market by purchasing conventional home loans from lenders. With the housing crash of 2008, Fannie Mae was put into federal conservatorship after it began losing money due to the crisis.

In the 1960s, Fannie Mae became a privately owned corporation under government sponsorship. Fannie Mae led the way to ensuring there would be money available for people to acquire long-term, fixed-rate home loans.

Before then, homeownership was difficult to achieve, and the Great Depression led to many people losing their homes and banks not having enough money to lend for mortgages. Fannie Mae was created by an act of congress in 1938 to make buying a home achievable for more Americans.

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