What is the difference between Fannie Mae and Freddie Mac?
Fannie Mae and Freddie Mac are both government-sponsored enterprises (GSEs) that play a critical role in the American mortgage industry. However, there are a few key differences between the two. Firstly, while both entities were established to provide liquidity to the mortgage market, Fannie Mae primarily focuses on purchasing mortgages from lending institutions, while Freddie Mac aims to invest in mortgage loans and mortgage-backed securities. Additionally, Fannie Mae tends to specialize in supporting traditional mortgages, including both single-family and multifamily homes, whereas Freddie Mac primarily focuses on supporting the multifamily housing sector. Moreover, Fannie Mae operates under a congressional charter, while Freddie Mac is a publicly traded company. Despite these differences, both organizations serve to enhance the availability and affordability of mortgage credit in the United States.
Answered Nov 1, 2023
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