Freddie Mac is a corporation chartered by the United States Congress. Freddie Mac seeks to lower the costs of financing homes, as well as offer housing opportunities to a broad spectrum of people, including low-income families and minorities. The corporation also promotes education among its consumers and participation in the community.
Much like Fannie Mae, Freddie Mac does not lend directly to borrowers. Instead the corporation purchases mortgages that borrowers have gotten to finance the purchase of a home. Freddie Mac then bundles the mortgages they have bought and sells them to investors. The lenders use the profits they make from the sale of the mortgages to Freddie Mac to fund more mortgages. That way, funds are available for the mortgage market so borrowers can continue to take advantage of mortgage products. The investors who bought the mortgages from Freddie Mac profit from the interest that homeowners pay on their mortgages. If your mortgage has been bought by Freddie Mac, you may not even know it. Most of their work takes place behind the scenes and likely has no direct effect on you. This is how Freddie Mac operates and keeps mortgage funds available for borrowers.
Though Freddie Mac is chartered by Congress, it is not a government agency. Freddie Mac does not receive federal money for its operations, and because of its size, Freddie Mac pays a great deal in taxes. The corporation is owned by shareholders and is traded in the New York Stock Exchange as well as the Pacific Stock Exchange.
The housing mission established by Freddie Mac is regulated by the U.S. Department of Housing and Urban Development (HUD). The Office of Federal Housing Enterprise Oversight (OFHEO) is in charge of regulating the safety standards established by Freddie Mac.