Question

Created as the Federal National Mortgage Association in 1938, ___ is a government-sponsored enterprise that buys mortgages mostly from large commercial banks, which it bundles and sells as mortgage-backed securities.

a) Freddie Mac
b) FHA
c) Ginnie Mae
d) VA

Answer 1

The Federal National Mortgage Association, known as Fannie Mae, is the government-sponsored enterprise created in 1938 to buy and bundle mortgages from banks into mortgage-backed securities.

Step-by-step explanation:

Created in 1938 as the Federal National Mortgage Association, the correct answer is Fannie Mae. This government-sponsored enterprise purchases mortgages primarily from large commercial banks. It then bundles these mortgages into pools and sells them as mortgage-backed securities. This is part of a broader process where government enterprises like Fannie Mae and Freddie Mac buy mortgages from banks, which helps to ensure a consistent supply of mortgage funding. This contributes to making homeownership more accessible for families across the United States.