Housing sits at the heart of our daily lives – and the American economy. Strong housing markets stabilize communities, allow families to build wealth, and drive economic growth. But access to housing hasn’t always been as widely available as it is today.

When the Great Depression froze mortgage lending, the federal government created new tools to revive the system: FHA to insure bank loans, and later, Fannie Mae (1938) and Freddie Mac (1970) to help lenders make mortgages available to more families. By purchasing mortgages and bundling them into securities sold to investors, the Enterprises free up lenders’ resources so more families can access long-term, affordable home loans.

Together, Fannie Mae and Freddie Mac became the backbone of America’s housing finance system. They keep the 30-year fixed-rate mortgage — the most common loan in the U.S. — alive and attract global investment that keeps costs down for homeowners and renters. Since 2008, both companies have operated under conservatorship, with their regulator (FHFA) taking a more active role in ensuring stability and affordability.

But their mission isn’t just limited to finance — it’s also to create opportunities where markets have often failed, so that every community in America can access housing. The Enterprises support access to housing in all communities through:

• Affordable housing goals. Fannie Mae and Freddie Mac’s affordable housing goals ensure that they provide access to affordable homeownership and rental housing for families of all incomes, not just the wealthiest with the biggest loans. 

• Duty to Serve. Congress directed Fannie Mae and Freddie Mac to serve three critical but often underserved markets: rural housing, manufactured housing, and affordable housing preservation. Fannie Mae and Freddie Mac each solicit stakeholder input and develop three-year plans with programs and products to help them meet housing needs in these markets — along with targets for service and reach.

• Housing Trust Fund and Capital Magnet Fund contributions. The Enterprises are required to contribute 4.2 basis points (0.042%) of each dollar of the unpaid principal balance on new Enterprise loans each year to two affordable housing supply funds: the Housing Trust Fund (HTF) and the Capital Magnet Fund (CMF). HTF goes to states to increase the supply of housing for the lowest-income households. CMF funds competitive grants that leverage private dollars for affordable housing and economic development benefiting lower-income households.

• LIHTC investments to boost housing supply. The Enterprises make equity investments in Low-Income Housing Tax Credit (LIHTC) developments, helping finance the construction and preservation of affordable rental housing across the country. These investments expand supply, stabilize communities, and support households most in need of affordable homes.

Today, too many families are still struggling to find affordable housing — whether they are looking to rent or are ready for homeownership. The U.S. has a significant housing supply gap, with estimates of the housing shortage ranging from 1.5 million to 5.5 million homes for homeowners and renters. Closing the supply gap and bringing down costs depends not just on investment, but also on affordable long-term mortgages that can make both homeownership and rental housing possible.

Fannie Mae and Freddie Mac are the backbone of the U.S. housing system, producing those affordable mortgages. Their scale and nationwide reach help bring down financing costs in every corner of the country and provide access to long-term, affordable mortgages that families and renters depend on.