The Federal Home Loan Mortgage Corporation, Freddie Mac, was created by the Emergency Home Finance Act of 1970 to compete with Fannie Mae, which had been privatized in 1968 and was the only big buyer of mortgages. Freddie Mac does not lend to homebuyers. It buys loans from banks, bundles them into mortgage-backed securities for global investors and charges a guarantee fee to promise timely payments. The securities stated they were not backed by the U.S. government, but its congressional charter and Treasury credit line created an implicit guarantee, worth about $6.5 billion a year to the GSEs according to a 1996 Congressional Budget Office estimate.

After 2001, private-label securitizers grew by packaging subprime and Alt-A loans, and Freddie Mac, answering to shareholders, began guaranteeing nontraditional adjustable-rate mortgages that relied on rising prices. When prices fell after 2006, defaults overwhelmed it. On September 7, 2008, the Federal Housing Finance Agency placed Freddie Mac and Fannie Mae in conservatorship, Treasury committed up to $100 billion in senior preferred stock at a 10 percent dividend, the stock fell to about $1, and it was delisted in 2010. The GSEs had drawn leaders such as Kenneth Duberstein, Franklin Raines and Jamie Gorelick, and reform bills in 2003 and 2005 stalled. In 2025 it reported $23.27 billion in revenue and $10.73 billion in net income.

• Banks that sell loans to Freddie Mac get fresh cash to make new loans.
• Banks could hold GSE debt toward their capital reserve requirements.
• Top campaign recipients included Roy Blunt, Bob Bennett, Chris Dodd, John Kerry and Barack Obama.
• A 2005 Senate reform bill from Chuck Hagel, Elizabeth Dole and John Sununu was later co-sponsored by John McCain.
• Since 1971 its weekly Primary Mortgage Market Survey has reported average 30-year and 15-year fixed rates, now drawn from its underwriting systems.