Freddie Mac

A shareholder-owned company that was set up by Congress in 1979 with the objective of stabilizing the U.S. mortgage markets and expanding opportunities for home ownership and affordable rental housing. Freddie Mac does not issue mortgages itself, but purchases them from lenders throughout the U.S. Those loans are packaged together and sold to investors in a process called securitization. When Freddie Mac buys mortgages, it allows mortgage lenders to make additional loans to homeowners, which ultimately provides low- to middle-income homeowners and renters with lower housing costs and better access to home financing. Freddie Mac also invests directly in mortgages. It funds the purchases by selling bonds to investors. Through the purchases Freddie Mac is able to give investors another way to indirectly invest in mortgages in the U.S. and thus provide people with more affordable mortgage financing. The full name of Freddie Mac is the Federal Home Loan Mortgage Corp. (FHLMC), which is infrequently used.