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What is a GSE?
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A GSE is a government-sponsored enterprise which are corporations created by Congress to provide financial services that improve our economy. While run by the private sector, they still receive federal government support.
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What is Fannie Mae?
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Fannie Mae refers to the Federal National Mortgage Association or FNMA. Somewhere along the way, the FN turned into Fannie, the MA turned into Mae, and the nickname just stuck!
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What is the Federal National Mortgage Association?
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The FNMA was created in 1938 after the Great Depression. The goal of FNMA was (and still is) to provide access to affordable housing by making sure mortgage companies can lend funds at fair rates.
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What is Freddie Mac?
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Freddie Mac is the nickname for the FHLMC, which stands for Federal Home Loan Mortgage Corporation.
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What is the FHLMC?
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The FHLMC is a GSE that was founded by Congress in 1970 under the Emergency Home Finance Act. The Act was brought about because the government wanted to produce more competition in the secondary mortgage market.
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What makes Freddie Mac different from Fannie Mae?
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The biggest difference is Freddie Mac buys their mortgages from smaller banks, while Fannie Mae works with larger banking institutions. They also have different down payment guidelines and requirements.
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