The U.S. government-sponsored enterprise created in 1938 to provide liquidity to the home-mortgage market was Fannie Mae.
Fannie Mae began as the Federal National Mortgage Association under the National Housing Act of 1938. Its original purpose was to buy mortgages from lenders, giving those lenders funds to make additional home loans. This helped create a more liquid and standardized secondary mortgage market in the United States.
Congress converted Fannie Mae into a shareholder-owned company in 1968. It later became a government-sponsored enterprise, meaning it is privately owned but operates under a federal charter with a public-policy role. Fannie Mae does not usually lend directly to individual homebuyers; it purchases or guarantees qualifying mortgages originated by approved lenders.
Freddie Mac was created in 1970 as a separate competitor. Ginnie Mae, established in 1968, guarantees securities backed by federally insured or guaranteed loans, rather than performing the same conventional-loan role as Fannie Mae.