# Freddie Mac **Freddie Mac** (the Federal Home Loan Mortgage Corporation) is the smaller of the two **government-sponsored enterprises (GSEs)** that anchor U.S. housing finance. Congress chartered it in 1970 to compete with [[Fannie Mae]] and broaden the secondary mortgage market; like Fannie, it buys mortgages from lenders, guarantees them, and securitizes them into mortgage-backed securities, sustaining the liquidity behind American home lending. Freddie shares Fannie's hybrid public-private structure and the same **implicit federal guarantee** — and the same vulnerability. On **September 7, 2008**, it was placed alongside Fannie Mae into **conservatorship** under the Federal Housing Finance Agency, part of the roughly $187 billion Treasury rescue of the two GSEs (since repaid). It too remains in conservatorship, and the long-running, repeatedly-deferred question of whether and how to "release" the GSEs back into private hands is a recurring policy and investor fight. For the KB, Freddie Mac carries the same significance as its twin: it is a standing illustration of [[Moral Hazard (Term)]] in the [[The Banking System]], and a focal point of the conservative **GSE-blame narrative** about the [[2008 Financial Crisis]] (see [[Fannie Mae]] for the fuller treatment of that dispute). ## See Also - [[Fannie Mae]] - [[The Banking System]] - [[Moral Hazard (Term)]] - [[2008 Financial Crisis]] - [[Financial System Timeline]] - [[Financial System Hub]]