Fannie Mae is the more common alias of The Federal National Mortgage Association (FNMA) is a publicly traded (OTCQB: FNMA), quasi-private, government sponsored enterprise (GSE) created in 1938 to assist in providing liquidity, stability and affordability in the mortgage market by purchasing portfolios of conventional mortgages and creating mortgage-backed securities using the mortgage pools as collateral.
This process is designed to allow lenders to “recycle” their capital more rapidly and redeploy funds through additional lending which indirectly increases the number of lenders, and available debt, in the market. In this regard, Fannie Mae operates in a similar fashion to the Federal Home Loan Mortgage Corporation (FHLMC, Freddie Mac).