But while Freddie Mac might sound like a generous uncle, it’s more closely related to Uncle Sam. So what is Freddie Mac, and how does it help you when buying a home?
Freddie Mac is the Federal Home Loan Mortgage Corporation, a private corporation founded by Congress in 1970. Freddie Mac supports the secondary mortgage market by purchasing residential mortgage loans, securitizing them, and selling them to investors (usually through Wall Street).
By purchasing mortgage loans, Freddie Mac increases the availability and affordability of home loans for low- and middle-income Americans.
So while you won’t normally deal with them directly, Freddie Mac has a major impact on the price of mortgage loans -- something that does affect you directly.
Here’s how Freddie Mac explains their primary benefit to home buyers. The following passage comes from their website, www.FreddieMac.com:
"Currently, we buy one mortgage every seven seconds to help finance one in six American homes ... Because Freddie Mac exists, millions of Americans benefit from lower interest rates, readily available home mortgage credit, a wide choice of mortgage products and reduced loan origination costs."
Educating Home Buyers
Freddie Mac also plays a major role in educating home buyers. Their website offers a lot of informative (and credible) articles on home ownership, home buying, mortgages and more. To use these resources, visit www.FreddieMac.com.
* Copyright 2006, Brandon Cornett. You may republish this article in its entirety, provided you keep the byline, author's note and website hyperlink intact.
