 TITLE: How Do Fannie Mae and Freddie Mac Loans Work? CONTENT: Why Do Fannie Mae and Freddie Mac Loans Exist?\n----------------------------------------------\nFannie Mae and Freddie Mac were both created by Congress. And while they don't lend directly to homebuyers, they still play an important role in financing home loans. By purchasing mortgages and selling them to investors, Fannie Mae and Freddie Mac free up cash for banks, mortgage companies and other lenders to finance home purchases. This also helps keep down interest rates and stabilizes the lending market.\nFannie Mae was established in 1938 and Freddie Mac in 1970. They're structured so that the federal government guarantees they won't default on their debt.\nAmid the COVID-19 pandemic, American homeowners with Fannie Mae or Freddie Mac loans have been able to take advantage of potential financial relief if they were struggling to make their mortgage payments. Relief options include reduction of monthly payments or creation of a repayment plan. END