Freddie Mac

Freddie Mac is the commonly used name of the Federal Home Loan Mortgage Corporation, a U.S. government-sponsored enterprise created by Congress in 1970. Its central role is in the secondary mortgage market rather than in originating most mortgages directly to consumers. Freddie Mac purchases eligible residential mortgages from approved lenders, pools those loans, and guarantees or sells mortgage-backed securities to investors. By converting mortgage loans into tradable securities, the company returns capital to lenders and helps them continue making loans to home buyers and homeowners refinancing existing debt. The company was established through the Emergency Home Finance Act of 1970 after Congress sought to create competition for the newly privatized Fannie Mae and to broaden the flow of mortgage funding. Freddie Mac initially had close ties to the Federal Home Loan Bank System and primarily served savings and loan associations and other depository institutions. Later, its business expanded across the conventional conforming mortgage market, including single-family and multifamily housing finance. Its securities became important instruments in the U.S. fixed-income market and are commonly traded in the to-be-announced mortgage market. Freddie Mac generally earns revenue through guarantee fees and related income. In return for those fees, it assumes specified credit risk on loans underlying its mortgage-backed securities, subject to the terms of its programs and applicable regulation. The enterprise does not issue an explicit U.S. government guarantee on its securities, but investors historically treated its government-sponsored status as providing substantial implicit support. That perception lowered funding costs while also creating significant public-policy and systemic-risk concerns. During the housing and financial crisis that intensified in 2007 and 2008, losses and concerns about the solvency of Freddie Mac and Fannie Mae threatened the stability of the mortgage market. On September 7, 2008, the Federal Housing Finance Agency placed both enterprises into federal conservatorship. The U.S. Treasury provided financial support through senior preferred stock arrangements and a funding commitment. Freddie Mac continued operating as a major mortgage-finance intermediary, but its shares were later delisted from the New York Stock Exchange after failing to meet minimum price requirements. In conservatorship, Freddie Mac remained a major source of liquidity for conventional mortgages, multifamily housing, affordable-housing programs, and mortgage-credit-risk transfer transactions. It also publishes the Primary Mortgage Market Survey, a widely cited weekly measure of U.S. mortgage rates. The company operates under FHFA supervision and remains part of continuing policy debates over the future structure of the U.S. housing-finance system, the division between public and private risk, affordable housing, capital requirements, and the possible release or restructuring of the government-sponsored enterprises.

Before Freddie Mac was created, Fannie Mae was the principal institution purchasing mortgages from depository lenders in the United States. In 1968, Fannie Mae was divided into a privately owned corporation and Ginnie Mae, a government entity responsible for guaranteeing securities backed by certain government-insured or government-guaranteed loans. The restructuring left policymakers concerned about concentration in the secondary mortgage market and the availability of mortgage credit. Congress responded with the Emergency Home Finance Act of 1970, creating the Federal Home Loan Mortgage Corporation. Freddie Mac was designed to compete with Fannie Mae and initially focused on purchasing mortgages from savings and loan associations and other depository institutions. Its basic operating model was to acquire qualifying loans, pool them, and issue or support mortgage-backed securities. This secondary-market structure allowed lenders to recycle capital instead of holding every mortgage until maturity. The enterprise was initially owned by the twelve Federal Home Loan Banks and governed in connection with the Federal Home Loan Bank Board. Over time, Freddie Mac developed into a large participant in conventional mortgage finance, supporting both single-family and multifamily lending. Its charter and underwriting rules generally limited its purchases to conforming mortgages, although statutory loan limits and program rules changed over time. The distinction between conforming and non-conforming loans helped standardize a large portion of the mortgage market but also affected the availability and price of jumbo and other non-standard loans. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 reorganized the regulatory framework for Freddie Mac and Fannie Mae. Freddie Mac's institutional relationship with the Federal Home Loan Bank System was severed, and the company received a standardized corporate governance structure subject to federal oversight. The legislation also formed new supervisory arrangements after the abolition of the Federal Home Loan Bank Board. During the 1990s and early 2000s, Freddie Mac expanded its role in affordable-housing finance and received housing-goal credit for purchasing securities associated with subprime lending. At the same time, private-label securitization grew rapidly. Mortgage originators and investment banks increasingly used private securitization channels, including products backed by adjustable-rate and other nontraditional loans. Competition for market share encouraged changes in underwriting and increased exposure to a housing market that later deteriorated sharply. When home prices began falling and mortgage delinquencies and foreclosures rose, losses spread through the mortgage-finance system. Freddie Mac and Fannie Mae were especially important because of the size of their guarantees and their role in maintaining liquidity. In July 2008, Congress and federal agencies adopted measures intended to strengthen confidence in the enterprises, including expanded Treasury authority and access to Federal Reserve lending. Those measures did not prevent the companies' financial position and share prices from deteriorating further. On September 7, 2008, FHFA Director James B. Lockhart III announced that Freddie Mac and Fannie Mae had entered conservatorship. The Treasury obtained senior preferred stock and established a commitment to provide capital support. The intervention was one of the most consequential federal responses to the financial crisis. Freddie Mac continued its core business under conservatorship, while its common and preferred shares lost most of their market value; its common stock was later delisted from the NYSE. Since the crisis, Freddie Mac has remained a central provider of conventional mortgage liquidity. It has expanded credit-risk transfer mechanisms, continued issuing and guaranteeing agency mortgage-backed securities, and maintained programs for multifamily and affordable housing. Its weekly Primary Mortgage Market Survey, first introduced in 1971, has become a widely cited indicator of U.S. mortgage rates. The enterprise's long-term status remains unresolved: policymakers continue to debate whether and how Freddie Mac and Fannie Mae should exit conservatorship, how much private capital should stand ahead of taxpayers, and what role the government should play in housing finance.

1. 2022PMMS methodology is modernized

   The mortgage-rate survey adopts application-based data in place of its former lender-survey approach.

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2. 2010NYSE listing ends

   Freddie Mac shares are delisted from the New York Stock Exchange after falling below the exchange's minimum price requirement.

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3. 2008Federal conservatorship begins

   FHFA places Freddie Mac under conservatorship during the U.S. housing and financial crisis, with Treasury capital support.

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4. 1995Affordable-housing credit expands

   Freddie Mac begins receiving affordable-housing goal credit for purchases involving subprime securities.

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5. 1989Federal housing-finance regulation is reorganized

   FIRREA revises Freddie Mac's regulatory and governance framework and separates it from the Federal Home Loan Bank System.

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6. 1971Primary Mortgage Market Survey begins

   Freddie Mac launches its recurring survey of conventional mortgage rates, later known as the PMMS.

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7. 1970Federal Home Loan Mortgage Corporation is established

   Congress creates Freddie Mac through the Emergency Home Finance Act to provide competition in the secondary mortgage market and expand mortgage funding.

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A systemically important, government-sponsored secondary-market institution that provides liquidity, standardization, and risk distribution for U.S. residential mortgage lending.

• Single-family mortgage purchase and securitizationMortgage finance1970

  Freddie Mac purchases eligible residential mortgages from approved lenders and finances them through mortgage-backed securities. The programs generally focus on conventional conforming loans and establish standardized underwriting, documentation, servicing, and disclosure practices. By purchasing or guaranteeing these loans, Freddie Mac helps lenders replenish funds for additional originations while giving investors access to agency mortgage credit.

• Freddie Mac mortgage-backed securitiesSecurities1970

  Freddie Mac pools qualifying mortgages and issues or guarantees mortgage-backed securities. Investors receive payments linked to the underlying mortgages, while Freddie Mac's guarantee structure is intended to address specified principal and interest payment risks. These securities are widely used in the U.S. fixed-income market and are commonly traded through the to-be-announced market.

• Multifamily housing financeReal-estate finance

  Freddie Mac finances apartment buildings and other multifamily properties through loan purchases, guarantees, and securitization. Its multifamily activities include conventional rental housing as well as programs designed to support affordable and workforce housing. The business provides long-term financing to property owners and helps connect rental-housing credit with institutional capital.

• Primary Mortgage Market SurveyMarket information1971

  The PMMS is Freddie Mac's weekly publication of average U.S. mortgage rates. It covers commonly used conventional, conforming, fully amortizing purchase loans, including 30-year and 15-year fixed-rate mortgages. The survey is frequently cited by media, lenders, researchers, and policymakers as a benchmark for consumer mortgage-rate trends.

• Mortgage-credit risk transferRisk management

  Freddie Mac transfers portions of mortgage credit risk to private investors and reinsurers through structured securities, insurance, and related transactions. These arrangements are intended to reduce the amount of risk retained by the enterprise and increase private-market participation while allowing Freddie Mac to continue supporting mortgage liquidity.

• 2022Adopt application-based mortgage-rate dataOther

  Freddie Mac reported challenges with the traditional lender-survey method used for its weekly mortgage-rate publication.

  What changed. The PMMS began relying on actual loan-application data submitted through Freddie Mac's automated underwriting system, while retaining weekly publication.

  Aftermath. The survey continued as a major public reference for U.S. mortgage-rate movements with a revised data foundation.

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• 2008Enter federal conservatorshipOther

  Falling home prices, rising delinquencies, mortgage-credit losses, and market concerns about the solvency of Freddie Mac and Fannie Mae threatened the broader housing-finance system.

  What changed. FHFA placed Freddie Mac under conservatorship and Treasury received senior preferred stock while committing capital support.

  Aftermath. The company continued operating under federal oversight, and its common stock was eventually delisted from the NYSE.

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• 1970Create a competing secondary mortgage-market institutionStrategy

  Congress sought to broaden mortgage liquidity after Fannie Mae's restructuring and reduce reliance on a single major purchaser of home loans.

  What changed. The Emergency Home Finance Act created Freddie Mac to purchase mortgages from depository institutions and support mortgage-backed securities.

  Aftermath. Freddie Mac became one of the two dominant conventional secondary-market enterprises in U.S. housing finance.

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• 2008Housing-crisis losses and federal conservatorshipControversy

  Freddie Mac became a central subject of the U.S. housing and financial crisis because of its scale, government-sponsored status, and exposure to mortgage-credit losses. Federal regulators placed the company into conservatorship and Treasury provided capital support to prevent a disorderly failure and protect mortgage-market functioning.

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• 2003Accounting and earnings-management controversyControversy

  Freddie Mac disclosed accounting problems in the early 2000s, leading to management changes and regulatory scrutiny. The episode raised questions about financial reporting, executive oversight, and the governance of large government-sponsored enterprises.

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• 2025Michael T. Hutchins becomes chief executive again

  Michael T. Hutchins returned to the chief executive role after serving as interim CEO during a leadership transition.

  Leadership change
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• 2022Freddie Mac changes methodology for its mortgage-rate survey

  The Primary Mortgage Market Survey moved from a traditional lender questionnaire toward actual loan-application data submitted through Freddie Mac's underwriting systems.

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• 2010Freddie Mac shares are delisted from the New York Stock Exchange

  The company's common stock was removed from NYSE trading after its market price fell below exchange requirements; trading continued over the counter.

  RegulationOther
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• 2008FHFA places Freddie Mac into federal conservatorship

  The Federal Housing Finance Agency assumed control of Freddie Mac during the financial crisis, with Treasury support intended to stabilize the mortgage market.

  RegulationOther
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1. Freddie Mac
2. Federal Housing Finance Agency: Conservatorship
3. Freddie Mac Primary Mortgage Market Survey
4. Freddie Mac official website