Here's a look at Freddie Mac and Fannie Mae, publicly traded mortgage finance companies created by the federal government.
What is Freddie Mac?
It is the common name for the Federal Home Loan Mortgage Corp., based in McLean, Va.
What is Fannie Mae?
It is the common name for the Federal National Mortgage Assn., based in Washington.
What do they do?
They buy mortgages from banks, savings and loans and other mortgage lenders. Fannie Mae and Freddie Mac package some of those home loans into mortgage-backed securities, which are then sold as guaranteed investments.
What kind of loans do Fannie Mae and Freddie Mac buy?
Under their charters, the companies can buy mortgages only if the amount borrowed falls under a specified dollar level that is adjusted periodically. These are called "conforming" loans.