Federal National Mortgage Association (FNMA)

The federal government established Fannie Mae, as it is known, in 1938. Its purpose was to expand the flow of mortgage money by creating a secondary market. FNMA accomplished this by buying FHA insured mortgages. In 1968, Fannie Mae became a stockholder-owned company and expanded its operations to include other mortgages in addition to FHA loans. Fannie Mae does not lend money directly to borrowers. FNMA buys loans meeting its standards from lenders, which enables those lenders to continue making more loans. Upon purchasing a loan, Fannie Mae might keep that loan in its portfolio as an investment or it may be packaged as a debt security and sold to other investors as a mortgage-backed security (MBS).

Federal Home Loan Mortgage Corporation (FHLMC)

Freddie Mac is a stockholder-owned corporation chartered by the United States Congress in 1970. Though Freddie Mac has the same charter, congressional mandate and regulatory structure, it pursues a different business strategy than Fannie Mae. It purchases residential mortgages and mortgage-related securities from approved banks and lenders. Freddie Mac packages these mortgages into securities that they sell to investors. Freddie Mac guarantees those securities to the investors.

Government National Mortgage Association (GNMA)

Ginnie Mae is a government organization regulated by the Department of Housing and Urban Development (HUD). In 1968, Fannie Mae was split into two separate entities: (1) Fannie Mae and (2) Ginnie Mae. Fannie Mae became a federally chartered, privately owned corporation and Ginie Mae became a sholly owned government organization that gets financial support from the U.S. Treasury. Ginnie Mae exists to ensure liquidity for the U.S. government-insured mortgages including those insured by the Veterans Administration (VA), Federal Housing Administration (FHA), and the Rural Housing Administration (RHA). Ginnie Mae purchases loans on the secondary market and then issues federally insured mortgage-backed securities. Additionally, Ginnie Mae services a portfolio of loans owned by the U.S. government and is the only issuer of mortgage-backed securities guaranteed by the U.S. government.
Ginnie Mae securities have the full faith and credit of the U.S. government, making these securities an extremely safe investment. The mortgages purchased by Ginnie Mae are typically low-to-moderate income or first-time homebuyers.

Federal Agricultural Mortgage Corporation

The Federal Agricultural Mortgage Corporation, also known as Farmer Mac, is a federally chartered, stockholder-owned organization created by the U.S. Congress in 1988 to attract capital for financing agricultural and rural properties. It is primarily designed to benefit farmers and ranchers by maintaining a dependable and competitive supply of mortgage credit.  Like the other secondary-market participants, Farmer Mac purchases qualified loans for lenders thereby replenishing their source of capital to make new loans. It sells securities to investors backed by the mortgages it purchases. Farmer Mac also guarantees timely payment of principal and interest on securities backed by guaranteed portions of farm ownership and farm-operating loans as well as rural business and community-development loans. Though much smaller than Fannie Mae, Freddie Mac, and Ginnie Mae, it provides a much-needed secondary market for loans on rural properties, farms and ranches.