Florida Real Estate License Renewal Practice Test 2026 – All-in-One Guide to Ensure Your Successful Renewal!

Freddie Mac, officially known as the Federal Home Loan Mortgage Corporation, plays a significant role in the U.S. housing finance system. It is known for being one of the first entities to issue mortgage-backed securities (MBS) that are backed by conventional loans, which are not insured or guaranteed by the federal government. This innovation allows for greater liquidity in the mortgage market, enabling lenders to provide more loans to homebuyers. By purchasing mortgages from lenders, Freddie Mac helps to ensure that they have the funds necessary to continue lending, thus stabilizing the housing market.

The other options do not accurately describe Freddie Mac’s primary function. For instance, while there are federal agencies involved in insuring mortgage loans, such as the Federal Housing Administration (FHA), Freddie Mac does not provide insurance. Similarly, while there are programs designed to assist first-time homebuyers, they are separate from Freddie Mac's core functions. Lastly, Freddie Mac does not specialize in FHA loans, as those are backed by the FHA and typically have different underwriting criteria and insured protections.