Freddie Mac
Freddie Mac (Federal Home Loan Mortgage Corporation) is a government-sponsored enterprise that purchases and securitizes conventional mortgage loans, providing stability and liquidity to the housing market.
Like Fannie Mae, Freddie Mac buys loans from lenders after closing, allowing those lenders to reinvest capital into new loans. Freddie Mac sets its own underwriting guidelines, which closely mirror — but are not always identical to — Fannie Mae's standards.
Freddie Mac does not lend directly to consumers. Borrowers do not choose between Fannie Mae and Freddie Mac — the lender determines which entity will purchase the loan based on pricing, eligibility, and program guidelines.
Why This Matters: Freddie Mac and Fannie Mae together support the majority of conventional lending in the United States. Understanding their role helps you see why mortgage guidelines exist and how the system is designed to keep lending stable.
Common question
What is the difference between Fannie Mae and Freddie Mac?
Both purchase conventional loans from lenders and set underwriting guidelines. Lenders choose which entity will buy the loan based on pricing and program fit. Borrowers do not choose between them.
Does Freddie Mac lend to consumers?
No. Freddie Mac buys loans from lenders after closing. Borrowers work with their lender; the lender then sells the loan to Freddie Mac or Fannie Mae.
Related Topics
Related Mortgage Terms
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