Fannie Mae

The Federal National Mortgage Association, commonly known as Fannie Mae, is a government-sponsored enterprise (GSE) that plays a critical role in the United States’ housing finance system. Established in 1938 during the Great Depression, Fannie Mae's primary function is to provide liquidity to the nation's mortgage finance system by buying mortgages from lenders, packaging them into mortgage-backed securities, and selling these securities to investors. By providing banks and other mortgage lenders with a means to sell their existing loans, Fannie Mae helps increase the supply of credit available for new housing and frees up capital for lenders to make additional mortgages. This process stimulates the growth of the housing market, contributing significantly to homeownership and rental housing opportunities.