Final answer:
Fannie Mae and Freddie Mac are best described as mortgage lenders. They purchase mortgages from lenders and package them into mortgage-backed securities to support the U.S. housing market's liquidity and stability.
Step-by-step explanation:
The term that best describes Fannie Mae and Freddie Mac is a. mortgage lenders. These two government-sponsored enterprises (GSEs) play a key role in the housing finance system of the United States by purchasing mortgages from lenders and then packaging them into mortgage-backed securities, which are sold to investors. This process helps to provide liquidity, stability, and affordability to the mortgage market.
Fannie Mae, officially known as the Federal National Mortgage Association, and Freddie Mac, known as the Federal Home Loan Mortgage Corporation, do not directly offer mortgages to borrowers, but by buying mortgages from banks and other lenders, they enable those institutions to offer more loans.