Fannie Mae

Informal name for the Federal National Mortgage Association (FNMA). It is a federally chartered enterprise that purchases residential mortgages in the secondary market and converts them into securities for sale to investors. By purchasing mortgages, Fannie Mae supplies funds that lenders may loan to potential home buyers. It does not lend directly to home buyers. Also known as a government-sponsored enterprise (GSE). When it was on the verge of collapse as the housing market collapsed in 2008, it was taken over by the government, which pumped in billions of dollars to keep it afloat. In 2011, discussions were under way in Congress to wind down or end Fannie Mae’s role in the housing market.