Federal Home Loan Mortgage Corporation Law and Legal Definition

Federal Home Loan Mortgage Corporation (FHLMC) is a private corporation chartered by the U.S. Government. The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. It buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases. FHLMC guarantees the timely payment of interest and ultimate payment of principal. FHLMC is commonly called "Freddie Mac".