What Is Fannie Mae?

By Matthew DiLallo – Updated Aug 7, 2025 at 9:58 PM

Key Points

Fannie Mae buys conforming mortgage loans, boosting lender ability to issue new ones.
Fannie Mae secures purchased loans into MBS, selling them to investors like banks and REITs.
Fannie Mae support includes the government stepping in during the 2008 financial crisis.

The Federal National Mortgage Association (FNMA -1.73%), typically known as Fannie Mae, is a government-sponsored enterprise (GSE). It bolsters the housing market by increasing mortgage availability to low- to moderate-income borrowers.

Here's a look at what Fannie Mae does, its history, how Fannie Mae loans work, and an example of a Fannie Mae loan.

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An infographic defining and explaining Fannie Mae. — Image source: The Motley Fool

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Fannie Mae became a private enterprise in 1968. Congress allowed it to sell stock and bonds to become a self-funding and publicly traded company, enabling the government to remove Fannie Mae from the federal budget. However, it remained linked to the government as a GSE.

The financial crisis of 2008-2009, which caused the Great Recession, forced the government to step back in and directly support Fannie Mae in 2008. The government took over Fannie Mae and placed it into the conservatorship of the Federal Housing Finance Agency (FHFA). The FHFA financially supports Fannie Mae in exchange for preferred stock. The NYSE delisted Fannie Mae's common stock in 2010. However, it still trades publicly on the OTC markets exchange.

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.