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The Federal National Mortgage Association, or Fannie Mae, is one of the primary purchasers of eligible home loans from issuers. The Federal National Mortgage Association securitizes these loans into mortgage-backed securities, and sells the securities to investors. Congress created the Federal National Mortgage Association in 1938 to establish a secondary market for government-backed mortgages. The Federal National Mortgage Association became a private company in 1968, and is traded on the New York Stock Exchange. The Federal National Mortgage Association is still federally chartered 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 the Federal National Mortgage Association is federally backed, and thus the Federal National Mortgage Association is able to borrow at slightly lower rates. However, the Federal National Mortgage Association neither receives support from nor has its securities guaranteed by the US government. |
