Business and Personal Finance Dictionary

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• FEDERAL NATIONAL MORTGAGE ASSOCIATION (FANNIE MAE)
  
  Previously, Fannie Mae was a government owned corporation. However, in 1968, it was converted to a privately held corporation whose stock trades on the New York Stock Exchange. The purpose of Fannie Mae is to buy and sell real estate mortgages. Primarily, these mortgages are guaranteed by the Federal Housing Authority (FHA) and the VA. Fannie Mae gets the resources to purchase these mortgages from private investors and from borrowing from the Treasury Department. Fannie Mae issues mortgaged backed bonds which can be purchased by investors. However, and this is the only case where this is true, the Fannie Mae mortgage backed bonds are subordinated to regular debentures. Fannie Mae bonds pay semi-annual interest and are regarded as quite safe.
  
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