Skip to main content

What are Fannie Mae and Freddie Mac?

Fannie Mae and Freddie Mac are large companies that guarantee most of the mortgages made in the U.S. Together, they are also known as the government sponsored enterprises (GSEs). Historically, they were private companies operating with government permission and under government regulation. In late 2008, following the financial crisis, the U.S. government took over operations at both companies.

Loan guarantees from Fannie Mae and Freddie Mac reduce risk for lenders who make loans and investors who might purchase them.  This makes loans more affordable and contributes to the availability of 30-year fixed-rate loans. Loans that are not eligible for Fannie Mae or Freddie Mac guarantees are typically more expensive.

Loans guaranteed by the GSEs are known as conventional  loans. To qualify, these loans must meet certain criteria. Some requirements are established by government regulation (for example, maximum loan amounts), while others are set by the companies.

Take the next step

Buying a House

We've built tools to help you understand the mortgage process and compare options.

Visit our "Buying a House" guide

Was this answer helpful to you?

Please do not share any personally identifiable information (PII), including, but not limited to: your name, address, phone number, email address, Social Security number, account information, or any other information of a sensitive nature.