Fannie Mae, formally known as the Federal National Mortgage Association, is a government-sponsored enterprise (GSE) in the United States. It was established in 1938 to expand the secondary mortgage ma... Fannie Mae, formally known as the Federal National Mortgage Association, is a government-sponsored enterprise (GSE) in the United States. It was established in 1938 to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS), allowing lenders to reinvest their assets into more lending, thereby increasing the number of lenders in the mortgage market. Fannie Mae primarily operates by purchasing mortgages from certified lenders and either holding them in its own portfolio or pooling them into MBS, which are then sold to investors across the globe. This practice enhances liquidity and stability within the mortgage market, particularly crucial for the housing sector. The organization plays a critical role in ensuring that mortgage financing is readily available across the nation, even under strained economic conditions. Its operations significantly impact the housing and financial sectors, contributing to affordable housing finance and economic growth. Through its indirect backing, Fannie Mae facilitates economic expansion by supporting the accessibility and affordability of home ownership in the U.S.