The Federal Home Loan Mortgage Corporation (FHLMC) is most commonly known as Freddie Mac. Freddie Mac 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.

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