The Federal Home Loan Mortgage Corporation ("FHLMC") NYSE: FRE, commonly known as Freddie Mac, is a government-sponsored enterprise (GSE) sponsored by the United States Government. As a GSE, it is a privately-owned corporation authorized to make loans and loan guarantees. It is not backed or funded by the US Government, nor do the securities it issues benefit from any government guarantee or protection.
The FHLMC was created in 1970 to expand the secondary market for mortgages in the United States. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market.
Along with other GSEs, Freddie Mac purchases mortgages and related securities, and then issue securities and bonds in financial markets backed by those mortgages in secondary markets.
This secondary mortgage market helps to replenish the supply of lendable money for mortgages and ensures that money continues to be available for new home purchases. The name "Freddie Mac" is a creative acronym-portmanteau of the company's full name that has been adopted officially for ease of identification (see "Companies" below for other examples).