Fannie Mae

Fannie Mae, officially known as the Federal National Mortgage Association, is a cornerstone of the U.S. housing finance system. Established over 85 years ago, Fannie Mae operates in the mortgage finance market, primarily serving homeowners, homebuyers, and renters. The company’s mission is to facilitate access to affordable housing by purchasing mortgages from lenders, which in turn provides these lenders with the liquidity (cash flow) they need to offer more loans to consumers.

Fannie Mae’s business model revolves around buying mortgages from banks and other financial institutions. These purchased mortgages are then either held in Fannie Mae’s portfolio or packaged into mortgage-backed securities (MBS). These MBS are sold to investors, which helps to spread the risk and provide a steady flow of capital back into the housing market. This process ensures that lenders have the necessary funds to continue offering new mortgages, thus promoting homeownership and rental housing opportunities.

The company makes money through the fees it charges for guaranteeing the timely payment of principal and interest on the MBS it issues. Additionally, Fannie Mae earns income from the interest on the mortgages it holds in its own portfolio. By providing a reliable secondary market for mortgages, Fannie Mae plays a crucial role in maintaining the stability and affordability of the U.S. housing market.

Fannie Mae serves a diverse range of clients, including individual homebuyers, homeowners looking to refinance, and renters. The company also engages in community service and volunteerism, encouraging its employees to participate in various community-based initiatives. Recognized for its commitment to workplace diversity and inclusion, Fannie Mae has received numerous accolades, including high scores on the Corporate Equality Index and being listed among the best places to work by Glassdoor and Computerworld.

Keywords: mortgage financing, affordable housing, mortgage-backed securities, homeownership, liquidity, lenders, community service, diversity, inclusion, U.S. housing market.