Community Affairs – Affordable Mortgage Lending Center
Affordable Mortgage Lending Guide,
Part I: Federal Agencies and Government Sponsored Enterprises
Freddie Mac is a government-sponsored enterprise or GSE, created to ensure access to home mortgage credit. The primary business of Freddie Mac is to purchase loans from lenders to replenish their supply of funds so they can make more mortgage loans to other borrowers. Freddie Mac then issues securities backed by pools of these mortgages that it sells to the capital markets. Freddie Mac guarantees to investors prompt payment of interest and principal on the mortgages backing the securities. Banks may sell loans to Freddie Mac individually or pooled with other loans, or directly or through intermediaries.