When it purchases a mortgage from the loan originator, that bank is then able to use that money to create a new loan. Fannie Mae helps people gain access to mortgages through Mortgage-Backed Securities, or MBS (more on those in a minute).Ī: Fannie Mae buys mortgages from original lenders, mostly large banking institutions. Somewhere along the way, the FN turned into Fannie, the MA turned into Mae, and the nickname just stuck!Ī: Fannie Mae does not provide mortgages. It also allowed people who were on the brink of losing their home to refinance at a better rate. This helped people who normally could not afford mortgages secure financing. The goal of FNMA was (and still is) to provide access to affordable housing by making sure mortgage companies can lend funds at fair rates. Roosevelt constructed the New Deal to help people get back on their feet. Because the economy was in such a bad place, America needed a boost. Q: What is the Federal National Mortgage Association?Ī: The FNMA was created in 1938 after the Great Depression. While run by the private sector, they still receive federal government support.Ī: Fannie Mae refers to the Federal National Mortgage Association or FNMA. Wondering what all of this means? Don’t worry! We’re here to make sense of it all.Ī: GSE’s are corporations created by Congress to provide financial services that improve our economy. While we’re sure there are people with these names, when it comes to the mortgage industry, Fannie Mae and Freddie Mac are nicknames based on acronyms given to two Government-Sponsored Enterprises (GSE). You’ve heard of Fannie Mae and Freddie Mac, but you may not know what they are.
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