The Federal National Mortgage Association (FNMA) is most commonly known as Fannie Mae. Fannie Mae is a government-sponsored company that buys loans from mortgage lenders, packages those loans together and then sells them to investors. By purchasing loans from lenders, those lenders are able to continue to make more loans, so the liquidity of the mortgage market is improved.

Fannie Mae is quite similar to Freddie Mac. Loans that are able to be bought by Fannie Mae or Freddie Mac are known as conforming loans.