Fannie Mae FNMA

The Federal National Mortgage Association was chartered in 1938 as a federal agency to buy mortgages insured by the Federal Housing Administration, giving lenders money to make more home loans during the Depression. In 1968, partly to move its debt off the federal budget, Congress split it into a government agency, Ginnie Mae, and a privately owned, shareholder-held company that kept the name Fannie Mae and a congressional charter. As a government-sponsored enterprise it has special privileges, such as exemption from state and local income taxes, and investors long assumed the government would stand behind it.

Fannie Mae does not lend directly to homebuyers. It buys conforming mortgages from banks and other lenders, bundles them into mortgage-backed securities, and guarantees investors timely payment, freeing lenders to make new loans and making the 30-year fixed-rate mortgage widely available. Together with Freddie Mac, it backs roughly half of all outstanding U.S. home mortgages. It must meet federal goals for lending to low- and moderate-income families and underserved areas.

As mortgage defaults soared in 2008, Fannie Mae faced collapse, and on September 7, 2008, the Federal Housing Finance Agency placed it in conservatorship while the Treasury bought preferred stock to keep it solvent. Fannie Mae and Freddie Mac together drew about 191 billion dollars from the Treasury and have since paid back more than that in dividends, while a 2012 agreement that swept their profits to the Treasury was later ended to let them rebuild capital. Since 2025 the administration has pursued plans to release them from conservatorship and sell shares to the public. Supporters say returning them to private hands would end an open-ended government role, while critics warn it could raise mortgage rates and leave taxpayers exposed in the next crisis.