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Fannie Mae, or the Federal National Mortgage Association, is one of the primary purchasers of eligible home loans from issuers. Fannie Mae securitizes these loans into mortgage-backed securities, and sells the securities to investors. Congress created Fannie Mae in 1938 to establish a secondary market for government-backed mortgages. Fannie Mae became a private company in 1968, and it is traded on the New York Stock Exchange. Fannie Mae is still federally charted with a mission to provide funding for affordable housing and is subject to oversight by the Department of Housing and Urban Development. Because of this, some people wrongly assume Fannie Mae is federally backed, and thus Fannie Mae is able to borrow at slightly lower rates. However, Fannie Mae neither receives support from nor has its securities guaranteed by the US government. |
