The FNMA is the Federal National Mortgage Association. It is also commonly known as Fannie Mae. It is a government-sponsored enterprise or GSE in the eyes of the Internal Revenue Service. It has its founding year dating back to 1938 when Congress established it during the Great Depression.
The role of Fannie Mae is not of a company that does any type of actual mortgage lending to borrowers. What it instead does is to create an environment that is more flexible to borrowers, as well as lenders. This can help people get into the homes that they want at mortgage terms they can afford.
Fannie Mae provides guarantees through the secondary market; it will purchase and guarantee a mortgage in the secondary market and is a major player in this space. It is one of the two largest mortgage purchasing companies. The other is that of Freddie Mac or the Federal Home Loan Mortgage Corporation. Both of these are considered to be a government-sponsored enterprise in the eyes of the Internal Revenue Service.
Fannie Mae requires that each borrower has a valid Social Security number or business Tax ID Number (in addition to meeting existing legal residency and documentation requirements in order to apply for a loan.