Loan hubs guide
Fannie Mae vs Freddie Mac: what is the difference?
Buyers hear both names all the time. Here is what they have in common, the few places they differ, and where to look each one up. Neither lends to buyers.
Fannie Mae and Freddie Mac do the same job for a buyer: neither lends to you, both buy loans from lenders, and your lender, not you, decides which one buys yours.
| Fannie Mae | Freddie Mac | |
|---|---|---|
| What it is | The Federal National Mortgage Association, a company chartered by Congress. | The Federal Home Loan Mortgage Corporation, a company chartered by Congress. |
| Does it lend to buyers? | No. Apply with a lender. | No. Apply with a lender. |
| Who runs it today | It is under the conservatorship of the Federal Housing Finance Agency (FHFA). | It is under the conservatorship of the Federal Housing Finance Agency (FHFA). |
| What it buys | Conventional loans from lenders, when the loan fits its rules and the FHFA size limit. | Conventional loans from lenders, when the loan fits its rules and the FHFA size limit. |
| Its affordable program, by name | HomeReady. Ask a lender. | Home Possible. Ask a lender. |
| The rulebook lenders follow | The Selling Guide. | The Seller/Servicer Guide. |
| Who chooses which one buys your loan | Your lender. | Your lender. |
| Where to look up your own loan | Its loan lookup tool, on its own site. | Its loan lookup tool, on its own site. |
Why they look so alike
Both were created by Congress to keep money flowing to home lenders. Both buy loans that lenders have made, gather them into securities and sell those to investors. Both follow the same yearly size limit from the FHFA.
Where they differ
Each writes its own rulebook for lenders and gives its own name to its programs. For a buyer, the differences usually show up as small differences in a lender's paperwork and in which programs a lender offers, not in the loan you sign.
What to do with this
You do not pick one. Ask your lender whether your loan could be sold to either, and ask about each company's affordable program by name. To see which one owns a loan you already have, use the who-owns-my-mortgage guide.
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Educational only. AskResi is not a lender.