Study notes. AI-assisted reference for NMLS SAFE exam prep — verify against primary sources (CFR, statute, CFPB) before relying on it. Not legal advice.
Fannie Mae
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Fannie Mae, officially the Federal National Mortgage Association (FNMA), is a government-sponsored enterprise (GSE) that plays a crucial role in the U.S. housing finance system. Established in 1938, its primary purpose is to provide liquidity, stability, and affordability to the mortgage market.
Fannie Mae achieves its mission by:
- Purchasing Mortgages: Buying mortgages from lenders, which frees up capital for those lenders to make new loans.
- Securitization: Bundling these mortgages into mortgage-backed securities (MBS) and selling them to investors. This process helps ensure a continuous flow of funds for housing.
- Setting Standards: Establishing underwriting and servicing standards for the loans it purchases, which influences lending practices across the industry.
Historically, Fannie Mae played a role in the GSE Patch, a temporary category of Qualified Mortgage (QM) loans that were eligible for purchase by Fannie Mae or Freddie Mac while they operated under conservatorship. This patch expired in July 2021.
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