With the introduction of the 30-year fixed rate mortgage, Fannie Mae helped transform homeownership in America.
In the early years of the 20th century, purchasing a home was a cherished dream for many families. Yet without the long-term, fixed rate mortgage most homeowners have today, saving for a down payment was tough, loans were short-term, and large balloon payments awaited when those notes came due. During the Great Depression, nearly a quarter of the nation’s homeowners lost their homes to foreclosure. Banks simply didn’t have the funds to make home loans. Fannie Mae was created to help banks finance a new type of mortgage: the long-term, fixed rate loan. An innovative type of loan and unique to the United States, it expanded access to affordable homeownership and transformed the housing industry.
Our mission continues today, as we enable mortgage lending that is stable, efficient, and affordable for more people. Grounded in responsible risk management for sustainable housing finance, we continue to lead with innovative solutions and strive to be America’s most valued housing partner.
Congress Creates Fannie Mae as Part of Franklin D. Roosevelt’s New Deal
During the Great Depression, our country recognized the need for a reliable, steady source of funding for housing. Without Fannie Mae, families had no large access to affordable mortgage credit.
Helping Our Heroes Buy Homes
Fannie Mae financed home purchases for millions for GIs returning from World War II. The nation’s economy grew rapidly and the liquidity Fannie Mae provided allowed lenders to have the cash on hand to fund lending.
Growth and Prosperity
Through the second half of the 20th-century home-ownership grew and contributed to the rise of America’s middle class. The Charter Act reorganized Fannie Mae from a government agency into a mixed ownership corporation in 1954.
Bringing Wall Street to Main Street
In the 1968 HUD Act, Fannie Mae became a private share-holder-owned corporation chartered by Congress. Fannie Mae was removed from the federal budget and funded its operations through stock and bond markets.
A World of Opportunities
In the 1980s, the global capital markets became core to the company’s business through the development of Mortgage-Backed Securities. This propelled Fannie Mae to bring the world’s capital to America.
Crisis and Conservatorship
Housing prices plummeted and delinquencies rose during the financial crisis and the GSEs lost billions of dollars on investment portfolios and MBS guarantees, prompting the federal government to put Fannie Mae and Freddie Mac under conservatorship by FHFA.
The Heart of Housing
The company returned to profitability in 2012. In 2014, Fannie Mae had paid back all funds it received when it first went under conservatorship and has since put billions into the U.S. Treasury.