Freddie Mac

Freddie Mac is a financial institution established in 1970 that plays a crucial role in the United States housing market by enhancing the availability and affordability of homeownership and rental options. The organization purchases single-family and multi-family residential mortgages from various lenders and pools them to create mortgage-backed securities, which it sells to investors in the secondary market. This process increases the capital supply for mortgage lending, reduces interest rates for consumers, and transfers credit risk to well-capitalized investors globally. By facilitating these transactions, Freddie Mac contributes to the stability and liquidity of the housing finance system, ensuring that more Americans have access to affordable housing solutions.