You may have heard of Fannie Mae and Freddie Mac. What are they, and how do they affect mortgages? Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are Government Sponsored Enterprises (GSE). They are quasi-governmental entities that were established to enhance the flow of credit in the housing industry. They purchase mortgages from lenders in the secondary mortgage market and purchase the majority of the conforming loans (i.e. loan amounts $453,100 and less). As such, mortgages are underwritten to their guidelines. The guidelines between the two entities can differ. Fannie Mae could approve some...
