Question:

What's the difference between Freddie Mac and Fannie May?

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What's the difference between Freddie Mac and Fannie May?

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  1. They're both secondary-market loan buyers/guarantors.  They are both shareholder-owned private-corporations.

    The reason there's two companies is to prevent monopoly and spur competition.  Fannie Mae (Federal National Mortgage Association) was a government-owned monopoly from 1938-1968, and then in 1968 was converted to a private corporation.  Fannie Mae was still a monopoly however, so in 1970, the US Government spun a new corporation, the Federal Home Loan Mortgage Corporation aka Freddie Mac, off of Fannie Mae.

    But they're two completely different companies that do the same thing; much like Target and Walmart, or McDonald's and Burger King.


  2. There's really not a lot of difference.  They both are own by the federal government, with Fannie Mae being the oldes and largest.  They are who guarantess FHA loans basically.  Check the link below for more information about them both.

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