Fannie Mae
Fannie Mae, actually the Federal National Mortgage Association or FNMA, is a US federal agency created by Franklin Roosevelt in 1938 to provide liquidity to the single-family housing market by purchasing mortgages underwritten under its guidelines. Fannie Mae funds the purchase of those mortgage loans by issuing mortgage-backed securities to the public. Under the Housing and Development Act of 1968, Fannie Mae became a Government Sponsored Entity or GSE.
Common stock in Fannie Mae was sold to the public and its preferred stock was retained by the federal government. Further, the securities issuer portion of the business was retained by the federal government and renamed Ginnie Mae. It is important to note that Fannie Mae issued what was in effect an implied government guarantee while Ginnie Mae remained the only mortgage securities issuer that actually had the full faith and credit guarantee of the federal government.
Over the years, Fannie Mae enlarged its mandate to include underwriting mortgages for multifamily loans, affordable housing loans, and government-issued revenue bond issues. On September 6, 2008 Fannie Mae was taken into conservatorship by the federal government because of the losses incurred in its single family mortgage programs. However, Fannie Mae continues to purchase mortgages under its DUS multifamily loan programs and continues to be very active. Please see the Fannie Mae Loans which are offered by Darach Advisors.
