Fannie Mae

Fannie Mae is a government-sponsored enterprise that helps keep money flowing to home lenders across the country. Rather than lending directly to homebuyers, it buys mortgages from banks and other lenders, packages many of them together, and sells the resulting securities to investors. That process frees up cash so lenders can keep making new home loans, which is why Fannie Mae’s health and rules ripple through mortgage rates and housing supply nationwide.

Ownership and structure set Fannie Mae apart from an ordinary agency or a purely private company. It was created by Congress, operates with shareholders, and has spent an extended period under federal conservatorship following the 2008 financial crisis, meaning the government controls its operations while the debate over its long-term ownership continues. The tangle of public purpose and private structure, along with its sister enterprise Freddie Mac, is explained in Fannie Mae and Freddie Mac: The Government-Backed Mortgage Giants That Taxpayers Own.

Ongoing policy debates center on whether Fannie Mae should remain under government control indefinitely, be released back into fully private hands, or be restructured altogether. Supporters of change point to risks in leaving so much of the housing market backed by an entity in a prolonged government hold; others warn that removing that backing could raise borrowing costs or destabilize lending. That argument is laid out in Should the Government Sell Fannie Mae and Freddie Mac?. Related discussions touch on new mortgage products and lending innovations that regulators and enterprises like Fannie Mae are asked to weigh in on, such as in The 50-Year Mortgage: What It Is and Why Analysts Are Concerned.