Florida Real Estate License Renewal Practice Test

Fannie Mae, officially known as the Federal National Mortgage Association (FNMA), was established in 1938 during the Great Depression as part of a governmental effort to revitalize the housing market. The primary purpose of Fannie Mae is to provide liquidity, stability, and affordability to the mortgage market by purchasing mortgages from lenders, including those that are backed by the Federal Housing Administration (FHA). This ensures that lenders have the capital to continue issuing new loans, thus promoting home ownership.

Fannie Mae plays a crucial role in the housing finance system by helping to expand access to mortgage credit, particularly during economic downturns. The company operates in the secondary mortgage market, meaning it does not lend directly to homebuyers but instead buys existing loans from mortgage lenders to provide them with additional funds to offer more loans.

The other options describe entities or concepts that do not accurately depict Fannie Mae's role or history. For instance, choosing a private mortgage company lacks the essence of Fannie Mae's government affiliation, while references to real estate regulation or commercial real estate investments completely misrepresent its primary focus on residential mortgages.