Freddie Mac, officially known as the Federal Home Loan Mortgage Corporation (FHLMC), is a government-sponsored enterprise (GSE) in the United States. Along with its counterpart, Fannie Mae (the Federal National Mortgage Association), Freddie Mac plays a significant role in the secondary mortgage market. The mission of Freddie Mac is to promote stability and affordability in the U.S. housing market.

Here are key points about Freddie Mac:

1. **Creation and Purpose:**
– Freddie Mac was established by Congress in 1970 as a GSE to provide liquidity, stability, and affordability to the U.S. housing market. Its creation was part of an effort to expand the secondary mortgage market and make homeownership more accessible.

2. **Public Stock Ownership:**
– Unlike Fannie Mae, Freddie Mac has operated as a publicly traded company since its inception. However, it has a unique ownership structure. While it is a publicly traded corporation, its common stock is not listed on any stock exchange, and its voting common stock is held by the Federal Home Loan Bank System.

3. **Role in the Mortgage Market:**
– Freddie Mac operates in the secondary mortgage market, which involves buying mortgages from primary lenders (such as banks and mortgage companies). By doing so, Freddie Mac provides these lenders with funds, which they can then use to originate new mortgages. This process helps increase the availability of mortgage credit.

4. **Mortgage-Backed Securities (MBS):**
– Freddie Mac packages the mortgages it purchases into mortgage-backed securities (MBS) and sells them to investors in the capital markets. Investors receive a return based on the interest and principal payments from the underlying mortgages.

5. **Risk Management:**
– Freddie Mac engages in risk management activities to protect itself and investors from losses associated with changes in interest rates and credit risks. It uses financial instruments and other strategies to mitigate these risks.

6. **Conservatorship:**
– In 2008, during the global financial crisis, Freddie Mac, along with Fannie Mae, was placed into conservatorship by the Federal Housing Finance Agency (FHFA). The conservatorship was intended to ensure the stability of the institutions and protect the broader housing market.

7. **Government Support:**
– The U.S. government provides support to Freddie Mac through an agreement with the U.S. Department of the Treasury. This support is designed to maintain stability in the mortgage market.

8. **Affordability and Access to Homeownership:**
– Freddie Mac’s mission includes a focus on promoting affordability and expanding access to homeownership. It works to provide support for a wide range of borrowers, including those with low or moderate incomes.

Freddie Mac plays a vital role in the functioning of the U.S. mortgage market, helping to provide liquidity, stability, and affordability. The ongoing discussions about housing finance reform may impact the structure and role of Freddie Mac in the future.