Which organization is a government-owned enterprise in the mortgage market?

• A. Maggie Mae
• B. Farmers Home Administration
• C. Freddie Mac
• D. Fannie Mae

Answer: (C)

Freddie Mac is a government-sponsored enterprise created by Congress to support the secondary mortgage market. It helps liquidity in housing lending by buying mortgages from lenders, pooling them, and selling mortgage-backed securities to investors. This public mission comes with government backing and a charter, so Freddie Mac is viewed as government-affiliated, especially in times of financial stress.

Farmers Home Administration is a federal agency under USDA and not an operating enterprise in this part of the mortgage market, and Maggie Mae isn’t a real organization. Fannie Mae performs a similar role as another government-sponsored enterprise, but the item points to Freddie Mac as the example in this context.