What is the difference between Fannie Mae and Freddie Mac?

Fannie Mae and Freddie Mac are both government-sponsored enterprises (GSEs) created to support the United States housing market. The key difference lies in their focus and function. Fannie Mae primarily focuses on buying and guaranteeing mortgages originated by lenders, providing liquidity to the mortgage market. On the other hand, Freddie Mac focuses on purchasing and securitizing mortgages, then selling the resulting mortgage-backed securities to investors, providing stability and accessibility to the mortgage market. While both entities work to support homeownership and mortgage availability, their operational approaches vary slightly. Despite this difference, both institutions play crucial roles in creating a stable housing finance system to enhance affordability and stability for Americans nationwide.