What is Fannie Mae? What is Freddie Mac? Explain and Difference between the two.

Question

Accepted Answer

Fannie Mae and Freddie Mac are government-sponsored enterprises that provide liquidity to the mortgage market.

Fannie Mae and Freddie Mac buy mortgages from lenders and package them into securities that are sold to investors.
Fannie Mae was created in 1938 and Freddie Mac in 1970.
Fannie Mae is a nickname for the Federal National Mortgage Association and Freddie Mac is a nickname for the Federal Home Loan Mortgage Corporation.
Fannie Mae and Freddie Mac were placed into conservatorship by the federal government in 2008 during the financial crisis.
The main difference between the two is that Fannie Mae focuses on buying mortgages from larger commercial banks, while Freddie Mac focuses on smaller banks and credit unions.

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