What is Fannie Mae's role in the housing market?

Fannie Mae plays a crucial role in the housing market as a government-sponsored enterprise. Its main objective is to ensure affordable and accessible mortgage financing options for millions of Americans. Fannie Mae buys mortgages from lenders, thereby providing them with funds to create new mortgages. This process helps to increase the availability of affordable home loans and encourages homeownership across the country. By buying these mortgages, Fannie Mae also assumes the credit risk associated with them, which reduces the financial burden on lenders. Additionally, Fannie Mae pools these mortgages into mortgage-backed securities saleable in the secondary market. This helps to attract investors, provide liquidity to lenders, and ultimately funds more home loans, supporting economic growth and stability in the housing market.