Fannie Mae, began in 1938 under the title, the “Federal National Mortgage Association”, or FNMA. As part of FDR’s “New Deal”, in the aftermath of the Great Depression, the FNMA sought to provide local banks with federal funding in order to finance home mortgages. The overall goal at that time was to increase the level of home ownership and availability of affordable homes for the working class. Today, an additional goal of Fannie Mae is to ensure that working families also have the means to obtain quality rental housing.

An enterprise sponsored by the US government and chartered by Congress, Fannie Mae serves to strengthen the nation’s housing and mortgage markets by keeping a flow of money to the mortgage lenders.

As a national mortgage finance company, Fannie Mae does not provide loans. Instead, it guarantees mortgage lenders, banks, credit unions, and other financial institutions the ability to keep the funds flowing to eligible borrowers for home purchases or rentals.  Fannie Mae is regulated by the Federal Housing Finance Agency. After the mortgage crisis and subsequent economic downturn which occurred in 2008, Fannie Mae continues to develop new ways to create opportunities for buying and renting homes by reducing risk, increasing more flexibility for both buyers and lenders, and improving services overall.

Here are three specific ways that Fannie Mae strives to accomplish those goals:

• In an effort to make lending a less risky, more sustainable process, Fannie Mae encourages safer loan programs, such as long-term, fixed rate home loans.
• Fannie Mae also seeks to provide an ample flow of cash to its lending institutions so it can fulfill its role and enable mortgage liquidity.
• In response to the mortgage crisis of 2008, Fannie Mae established a foreclosure prevention operation. The goal is to prevent foreclosures and stabilize communities.