Fannie Mae vs. Freddie Mac

Fannie Mae and Freddie Mac are publicly held financial institutions that were created by Acts of Congress to enhance the liquidity and stability of the US secondary mortgage market. Their mission is to promote access to mortgage credit, particularly among low- and moderate-income households and neighborhoods.

Fannie Mae (the Federal National Mortgage Association) was created in 1938 (during the Great Depression) and at the beginning was called The National Mortgage Association of Washington. Its business was to purchase mortgages insured by the Federal Housing Administration (FHA) from financial institutions around the United States.

Fannie Mae played significant role in reducing the federal debt during the Vietnam War as was subsequently spun-off in 1968 as a publicly traded company. Its headquarter is based in Washington, DC

Fannie Mae mostly buys mortgage loans from commercial banks and sells them as mortgage-backed securities or agency bonds.

Freddie Mac (he Federal Home Loan Mortgage Corporation) has been created by the US Congress in 1970. At the time of creation it was owned by the 12 Federal Home Loan Banks and the savings and loans that were members of these Banks.

Freddie Mac became publicly traded in 1989 as part of the thrift crisis resolution.

Freddie Mac mostly buys them from smaller banks that are often called "thrift" banks and sells them as mortgage-backed securities or agency bonds. Its headquarter is based in McLean, VA.

In summary:

Both Fannie Mae and Freddie Mac are A U.S. government-sponsored, for profit enterprise that are active in the home mortgage loan business. They differ in terms of the time and reason they exist as well as sellers of mortgage loans they cooperate with.