Federal National Mortgage Association (FNMA)

The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a government-sponsored enterprise that supports the housing market by purchasing mortgage loans from lenders. This process provides lenders with fresh capital to offer more loans to homebuyers, promoting liquidity and stability in the mortgage market. Fannie Mae pools these loans into mortgage-backed securities, which are sold to investors. This system helps ensure that more people can access affordable financing for homes, while the organization manages the associated risks and maintains standards to promote a healthy housing finance system.