Definition

Proper noun: 1. A U.S. government-sponsored enterprise (GSE): Fannie Mae is the common name for the Federal National Mortgage Association (FNMA). It is a publicly traded company that operates under a congressional charter to support the secondary mortgage market in the United States. Its primary function is to purchase and guarantee mortgages from lenders, thereby providing liquidity to the housing finance system.

Usage

• Fannie Mae plays a crucial role in the U.S. housing market by providing stability and affordability.
• Many lenders sell their conventional mortgages to Fannie Mae to free up capital for new loans.
• The financial health of Fannie Mae is closely monitored due to its systemic importance.

Examples

Advanced Usage

• "Fannie Mae mortgage-backed security (MBS)": A type of security created when Fannie Mae pools purchased mortgages and sells the income-generating bonds to investors on the open market.
  • Pension funds often invest in Fannie Mae MBS for their relative safety and steady returns.

Variants and Related Words

• FNMA: The official acronym for the Federal National Mortgage Association.
• GSE (Government-Sponsored Enterprise): The category of financial institutions, created by the U.S. Congress, which includes Fannie Mae and its counterpart Freddie Mac (Federal Home Loan Mortgage Corporation).
• Conforming loan: A mortgage that meets the funding criteria of Fannie Mae and Freddie Mac, including limits on loan size.

Synonyms

• Federal National Mortgage Association (formal name)
• Mortgage aggregator (descriptive term for its function)

Notes

• "Fannie Mae" is a proprietary name and should be capitalized. It is often mentioned alongside Freddie Mac.
• While it is a publicly traded company, it operates under a federal charter and is subject to oversight by the Federal Housing Finance Agency (FHFA).

Noun

1. a federally chartered corporation that purchases mortgages