Fannie Mae (Federal National Mortgage Association)

Fannie Mae (Federal National Mortgage Association), created by Congress in 1938 and headquartered in Washington, D.C., is a government-sponsored enterprise that plays a pivotal role in the U.S. secondary mortgage market by providing liquidity, stability, and affordability to the nation's housing finance system. According to its website at fanniemae.com, Fannie Mae's mission is to facilitate equitable and sustainable access to homeownership and quality affordable rental housing across America. The company accomplishes this mission by purchasing mortgage loans from banks, credit unions, and other lenders, converting them into mortgage-backed securities (MBS) with a Fannie Mae guarantee of timely payment, and selling those securities to investors in the global capital markets — a process that replenishes lender capital for new mortgage origination and attracts global investment into the U.S. housing market.

Fannie Mae's core business activities, described at fanniemae.com, encompass the acquisition of single-family and multifamily mortgage loans from its lender customers and their conversion into guaranteed MBS; the management of a retained mortgage portfolio; and the development of innovative mortgage products and technologies that improve housing access and lender efficiency. Fannie Mae's guarantee on its MBS — which covers timely payment of principal and interest regardless of borrower performance — enables investors worldwide to purchase U.S. mortgage-backed securities with confidence in their credit quality, attracting global capital into the U.S. housing market at rates that keep mortgage financing more affordable for American homebuyers than would be possible without the secondary market liquidity Fannie Mae provides.

Fannie Mae has operated under conservatorship administered by the Federal Housing Finance Agency since September 2008, when the global financial crisis raised serious concerns about the GSEs' financial stability. According to fanniemae.com, the company has since returned to sustained profitability and has repaid more than $185 billion to the U.S. Treasury, substantially exceeding the government support received during the conservatorship period. Fannie Mae continues to play a central role in housing finance reform discussions and remains the backbone of the U.S. conforming mortgage market — supporting roughly one-third of all outstanding single-family mortgages in the United States and providing critical liquidity to the multifamily housing market that finances millions of apartment units serving renters across the country.