America relies on Freddie Mac to support the housing market and the nation’s renters, homebuyers and homeowners – across the entire country and in all economic cycles. Since being chartered by Congress in 1970, we have fulfilled our mission to keep mortgage money flowing, support the stability of the housing market, and promote housing affordability. And we continue to lead the housing industry forward, building a better housing finance system – for today and for tomorrow.
Freddie Mac operates in the U.S. secondary mortgage market. That means we don’t lend directly to borrowers but buy loans that meet our standards from approved lenders. With the money that lenders receive in return, they can make loans to other qualified borrowers. In securitizing pools of mortgages and selling the securities to investors, we shift a significant portion of the credit risk associated with the loans we own to private investors.
We conduct business through two business segments, the single-family business segment and the multifamily business segment. Those two segments are primarily supported by our Single-Family Division, Multifamily Division and Capital Markets Division.
Those divisions work with lenders of all sizes – national, regional, and community lenders and credit unions – to buy conventional, conforming mortgage loans for one- to four-unit homes – including condominiums and manufactured homes – up to a certain dollar amount set by our regulator. As part of our mission, we are committed to creating homeownership opportunities for people hoping to buy a home for the first time, earning low and moderate incomes, and living in underserved markets.
Because lenders know they can sell loans to us, they are more willing to make long-term, fixed-rate loans, which make mortgage payments more affordable to more households. When a homeowner faces financial difficulties, we work with the lender to help the borrower avoid foreclosure, where possible, or exit homeownership as smoothly as possible.
We also promote liquidity and make funding more available to borrowers by purchasing mortgage-related securities guaranteed by Freddie Mac and other financial institutions as investments. We fund these investments by issuing corporate debt securities. Freddie Mac’s investors include but are not limited to central and commercial banks, pension funds, insurance companies, and securities dealers from around the world.
Our multifamily business segment supports affordable rental opportunities across the nation, primarily through the work of our Multifamily Division and capital markets activities within that group and the Capital Markets Division.
Working with a network of specialized lenders, Freddie Mac provides funding for loans on properties ranging from five units to hundreds of units across multiple buildings. We support all types of multifamily properties nationwide, including conventional, seniors, student, and subsidized housing as well as smaller properties and manufactured housing communities.
Our funding is vital to making sure that renters have access to adequate, affordable apartment homes. Around 90 percent of the apartments we finance each year are affordable to low- or moderate-income renters. Multifamily borrowers mainly are commercial entities, such as property developers, and the properties are considered businesses. Our in-house teams closely oversee loan and property quality throughout the life of each loan.