Fannie Mae is one of the primary purchasers that facilitate homeownership by adding liquidity to the mortgage market when it purchases loans from lenders who use the funds received to make additional loans. Fannie Mae securitizes these loans into mortgage-backed securities, and sells the securities to investors.

The firm's common stock trades as FNM on the New York Stock Exchange. A security issued by this company that is backed by insured and conventional mortgages. Monthly returns to holders of Fannie Mae’s consist of interest and principal payments made by homeowners on their mortgages.

Congress created Fannie Mae in 1938 to establish a secondary market for government-backed mortgages. Fannie Mae is still federally charted with a mission to provide funding for reasonably priced housing and is subject to supervision by the Department of Housing and Urban Development. Nevertheless, some people wrongly believe Fannie Mae is federally backed, and thus Fannie Mae is able to borrow at slightly lower rates. Fannie Mae neither receives support from nor has its securities guaranteed by the US government.