Fannie Mae Law and Legal Definition
Fannie Mae is another name for the Federal National Mortgage Association. Fannie Mae is a private, shareholder-owned company that aims to assist Americans become homeowners. Rather than lending money directly to home buyers, Fannie Mae works with lenders to ensure they have sufficient money to lend to those trying to obtain mortgages. Fannie Mae stock (FNM) is actively traded on the New York Stock Exchange and other exchanges and is part of the Standard & Poor's 500 Composite Stock Price Index.
In 1938, the Federal government established Fannie Mae to increase the availability of mortgage funding by creating a secondary market. Fannie Mae was authorized to buy Federal Housing Administration (FHA)-insured mortgages, thereby replenishing the supply of lendable money. In 1968, Fannie Mae became a private company operating with private capital so that it could buy mortgages beyond traditional government loan limits.