On the other hand, Freddie Mac got its name from the Federal Home Loan Mortgage Corporation (FHLMC) acronym, another lender sponsored by the government to promote easy access to mortgage loans. ![]() Origin of Nameįannie Mae got its name from the Federal National Mortgage Association (FNMA) acronym, a government-sponsored mortgage loan company. Here’s a look at the difference between Fannie Mae and Freddie Mac. However, despite playing a similar role in the mortgage industry, they do have some differences. In fact, combined, the two agencies currently back up about 50% of all new mortgages in the U.S. These two agencies allow lenders to make more loans, meaning they prop up the U.S. Because Fannie Mae and Freddie Mac take on much of the risk, investors generally consider those securities to be safe. They buy mortgage loans from lenders, such as banks, package those loans into mortgage-backed securities, and then sell them to investors. Fannie Mae and Freddie Mac, which are government-backed agencies, play an integral role in the American housing system.
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