In real estate finance, the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, is a government sponsored enterprise that operates as an independent, publicly traded company. Its primary function is to create liquidity in the housing market by purchasing residential mortgage loans from lenders.
By buying conventional loans as well as FHA and VA loans and packaging them into mortgage backed securities, Freddie Mac helps ensure a steady flow of funds for home lending. This secondary market activity allows lenders to replenish capital, manage risk, and continue offering mortgage loans to homebuyers.
