Freddie Mac FHLMC

Congress created the Federal Home Loan Mortgage Corporation in the Emergency Home Finance Act, signed on July 24, 1970, to buy mortgages from savings and loan associations and give Fannie Mae a competitor. It was originally owned by the Federal Home Loan Banks, and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 turned it into a publicly traded, shareholder-owned company with a congressional charter. Like Fannie Mae, it is a government-sponsored enterprise headquartered near Washington, in McLean, Virginia.

Freddie Mac buys conforming mortgages from lenders, packages them into securities that it guarantees, and sells them to investors, supplying lenders with money for new loans. It also finances apartment buildings through a large multifamily business. Its business model mirrors Fannie Mae's, and the two use a common securitization platform and a single type of mortgage-backed security launched in 2019. It must meet federal affordable housing goals and is supervised by the Federal Housing Finance Agency.

In 2003 Freddie Mac disclosed it had misstated its earnings by about 5 billion dollars, an accounting scandal that led to large fines and new leadership. As the housing bubble burst, it was placed in conservatorship along with Fannie Mae on September 7, 2008, and received tens of billions of dollars from the Treasury, since repaid in dividends. Since 2025 the administration has pursued plans to end the conservatorship and sell shares to the public, possibly in combination with Fannie Mae. Supporters say private ownership would bring market discipline, while critics warn that removing explicit government backing could raise borrowing costs for homebuyers.