Fannie Mae (FNMA) and Freddie Mac (FHLMC) are companies that the US federal government set up and sponsors in order to support the mortgage industry and provide

Fannie Mae (FNMA) and Freddie Mac (FHLMC) are companies that the US federal government set up and sponsors in order to support the mortgage industry and provide liquidity to banks and other financial institutions that provide mortgages to Americans. So if a bank offers a mortgage to a customer and the loan conforms with Fannie and Freddie's underwriting policies, Fannie and Freddie will buy it from them them. They then package some of those loans into a loan portfolio and sell it to fixed income investors. About 70% of US mortgages are supported by Fannie and Freddie.