What is Freddie Mac?


Chartered by Congress in 1970, Freddie Mac is officially the Federal Home Loan Mortgage Corporation. Freddie Mac doesn’t directly provide loans to home buyers. Instead, it buys loans from other lenders, so those lenders have more funds for making mortgage loans to additional borrowers.

Lender not borrowers

The mortgages purchased by Freddie Mac are pooled and sold as mortgage-backed securities to investors. While Freddie Mac customers are lenders, not borrowers, Freddie Mac may own your mortgage via purchase from the lender.

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During the financial crisis, Freddie Mac ended up with a lot of REO – real-estate owned – foreclosed properties. Through its HomeSteps program, Freddie Mac lists available properties nationwide and offers financing through approved lenders in 10 states. The Federal Housing Finance Agency regulates Freddie Mac.

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