Definition
Freddie Mac is a government-sponsored enterprise competing with Fannie Mae in purchasing mortgages. Both GSEs serve the same purpose but maintain independent operations, occasionally with slightly different underwriting guidelines. Both make loans more accessible nationwide.
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Freddie Mac and Fannie Mae are the two largest players in the secondary mortgage market, collectively purchasing approximately 50% of all new mortgages. While both GSEs serve the same fundamental purpose, they maintain independent operations and occasionally differ slightly in underwriting guidelines. Freddie Mac is particularly focused on providing liquidity to community and regional lenders.
Pro Tip
Both Fannie Mae and Freddie Mac offer similar loan programs with comparable rates; shopping lenders who work with either GSE won't dramatically change your options.
Example
A regional credit union originates a mortgage and sells it to Freddie Mac, then uses the proceeds to fund another loan for a different borrower in the same community.