finance
Fannie Mae
The Federal National Mortgage Association, a government-sponsored enterprise that buys conforming mortgages from lenders in the secondary mortgage market and packages them into mortgage-backed securities. By purchasing loans, it provides lenders with fresh funds to make new loans. It sets underwriting standards that loans must meet to be sold to it.
- Exam tip
- Fannie Mae and Freddie Mac buy conventional conforming loans; Ginnie Mae guarantees securities backed by government loans (FHA/VA). None of them lend directly to consumers.
- Example
- A local bank makes a conforming loan, sells it to Fannie Mae, and uses the proceeds to make another loan.
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Last verified: 2026-10-23