Unless you work in the real estate industry, many of the names and terms might seem a bit confusing. One of the most popular questions we get is, “Who exactly is Fannie Mae?” The answer might be a little simpler than you think. The Federal National Mortgage Association is also known as Fannie Mae, a government-sponsored enterprise first founded during the Depression era. As a publicly traded corporation, Fannie Mae purchases mortgages to help ensure market stability.
Fannie Mae operates in the U.S. secondary mortgage market. Rather than making home loans directly to consumers, we work with mortgage bankers, brokers and other primary mortgage market partners to help ensure they have funds to lend to home buyers at affordable rates. We fund our mortgage investments primarily by issuing debt securities in the domestic and international capital markets.
Fannie Mae guarantees its mortgage-backed securities by setting guidelines for loan purchases (you may have heard the term “conforming loans”). The guidelines for conforming loans fluctuate based on a variety of factors
Fannie Mae was heavily involved in the sub-prime mortgage crisis from recent years. In mid-2008, the Treasury granted Fannie Mae access to low-interest loans in an effort to stabilize the market. In one of the last notable events of the Bush administration, Fannie Mae was placed under federal conservatorship in September 2008, and US Treasury funds were used to try and stabilize the organization.
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