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The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, was chartered by Congress in 1970 to expand the secondary market for mortgages in the United States to support homeownership for middle-income Americans. As a government-sponsored enterprise, Freddie Mac’s mortgages are backed by the federal government and it is one of the largest purchasers of mortgages.
Along with its sister organization Fannie Mae, Freddie Mac buys mortgages on the secondary market, bundles 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.
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