Most of us know Fannie Mae and Freddie Mac as government-sponsored mortgage giants that have largely taken over the mortgage market since the housing crisis. Did you know, however, that they were originally formed by president Franklin Delano Roosevelt as part of his New Deal intended to provide local banks with federal money for mortgages?
While it seems unlikely that the “government-sponsored enterprises” (GSEs) as they are known today, will ever return to quite such a minor position in the housing market, it does appear that our current administration is about to attempt some sort of change to their current role. Investors should watch closely, because anything that affects mortgage availability and affordable housing affects us all.
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