What does "Freddie Mac" mean?

Definition

Freddie Mac is a government-sponsored enterprise that buys mortgages from lenders, particularly smaller ones. This helps provide funds to the market so that more people can get home loans.

Understanding Freddie Mac's Role

Freddie Mac is involved after you get your mortgage. It buys mortgages from lenders, which helps make more loans available. Think of it as a helper for banks and lenders. For example, if a bank issues a $200,000 mortgage, Freddie Mac might buy it, giving the bank funds to offer another loan. This keeps the mortgage market fluid. It's not a direct lender, so you won't get a loan from Freddie Mac. It doesn't set your loan terms or rates, but it plays a vital part in keeping the mortgage system running smoothly.

People Want To Know

What does it mean that Freddie Mac bought my mortgage?

Freddie Mac buying your mortgage means that they have purchased your loan from the original lender. This transaction allows your lender to have more funds available to issue new mortgages, while you continue to make payments under the same terms. Your mortgage servicing may be handled by Freddie Mac or a different company they designate.

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