Mortgage Funding
One of the most important roles that Freddie Mac plays today is to provide continuous liquidity and keep mortgage funds flowing. With the housing markets and broader economy still recovering, keeping the mortgage markets liquid and stable is critical.
Today, Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.
In the first quarter of 2012, Freddie Mac provided over $114 billion of liquidity to the mortgage market, $89 billion of which supported single-family refinancing. Through this funding, Freddie Mac helped:
- More than 450,000 families own a home during one of the most challenging credit markets in years, including more than 416,000 who were able to refinance their mortgages into lower rates and/or shorter terms.
- More than 120,000 families rent a home or apartment.
Since the beginning of 2009, Freddie Mac has helped more than seven million families own or rent a home.
Other Benefits
Freddie Mac's role in the housing finance system has additional benefits for homeowners, lenders, and the housing market as a whole:
- Lower mortgage rates: Our liquidity contributes to lower mortgage rates for 30-year fixed-rate conforming mortgages relative to the "jumbo" mortgage loans we aren't allowed to buy. Over the last year, millions of borrowers have taken advantage of the lowest mortgage rates in five decades to buy and refinance homes.
- The 30-year fixed rate mortgage: We help make possible the freely prepayable 30-year fixed-rate mortgage on a scale that's unique to this country. The prepayable fixed-rate mortgage is the first choice for many consumers because it protects them from upward swings in interest rates and allows them to refinance whenever they want without penalty. By providing stability, certainty and flexibility in this way, the prepayable fixed-rate mortgage is a real economic asset for our nation.
- A "backstop bid” for mortgage lenders: Our lender customers know there will always be a buyer for their loans – which gives them the confidence to keep lending in any environment and in turn helps stabilize the market.
- We serve the market in good times and bad: We are an important counter-cyclical influence that stays in the market even when purely private capital has pulled out. This has been proven time and again - particularly during the events of recent years.