Conventional Home Loans and Mortgages

In February, 1938, the federal government establishes the National Mortgage Association of Washington to expand the flow of mortgage money by creating a secondary market.  It was soon named the Federal National Mortgage Association (FNMA).

Commonly known as "Fannie Mae", the Housing and Urban Development Act of 1968 was signed by President Lyndon B. Johnson that established it as a private, shareholder-owned company while continuing to provide secondary mortgage market support.

In 1970, President Richard Nixon signed the Emergency Home Finance Act which created a new secondary mortgage market participant known as the Federal Home Loan Mortgage Corporation (FHLMC), or commonly known as "Freddie Mac".

As the Nation continues to reach beyond record number home ownership rates, the role of Fannie Mae and Freddie Mac in providing residential home loans (referred to as conventional loans) has enabled millions of people the ability to purchase a home with a low down payment, reasonable interest rates, and a wide selection of options and mortgage financing programs for every consumer.  Though the two companies do not personally originate residential home loans, their ability to purchase loans on the secondary mortgage market allows them to set the rules and guidelines for the loans secured against their investments.