Definition
Fannie Mae is a government-sponsored enterprise that buys mortgages from lenders. This helps keep the housing market stable and ensures there is enough money for more home loans.
Understanding Fannie Mae's Role
Fannie Mae becomes relevant when lenders discuss options for selling your mortgage. It helps ensure lenders have money to provide more home loans. In simple terms, it's like a big helper for banks, making it easier for them to offer loans by buying mortgages they’ve already given out. Example: If a bank gives a $200,000 mortgage, Fannie Mae might buy it, allowing the bank to lend another $200,000. It's not a direct lender to consumers, so you won't get a loan directly from Fannie Mae. Instead, it operates in the background, supporting the mortgage market and helping maintain its stability.
