finance
Freddie Mac
Freddie Mac, the Federal Home Loan Mortgage Corporation, is a government-sponsored enterprise that buys conventional mortgages from lenders in the secondary mortgage market, pools them, and sells mortgage-backed securities to investors. This provides lenders with fresh funds to make more loans. Freddie Mac and Fannie Mae set the underwriting standards that define conforming loans. Freddie Mac does not lend directly to consumers.
- Exam tip
- Fannie Mae and Freddie Mac buy conventional loans; Ginnie Mae guarantees securities backed by government loans (FHA, VA). None make loans to homebuyers.
- Example
- A local bank makes a $320,000 conforming loan, then sells it to Freddie Mac and uses the proceeds to lend to another buyer.
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Last verified: 2026-10-23