What is the primary function of Fannie Mae?

The primary function of Fannie Mae is to provide liquidity, stability, and affordability to the mortgage market. This stems from its role as a government-sponsored enterprise (GSE) designed to support the secondary mortgage market. By purchasing mortgages from lenders, Fannie Mae enables those lenders to free up capital, allowing them to offer more loans to homebuyers. This process helps ensure that mortgage funds are available consistently, even during economic downturns, thereby promoting stability in the housing market.

Fannie Mae’s involvement leads to more affordable housing options as it aids in maintaining lower borrowing costs for consumers. This is crucial as it directly impacts the overall homeownership rates and contributes to the health of the economy. Hence, the organization's actions ultimately lead to increased liquidity in the mortgage market, ensuring that funds are available for borrowers seeking loans.

The other options reflect functions that are outside the scope of Fannie Mae's mission. For example, insuring loans against default is typically the role of entities like the Federal Housing Administration (FHA) or private mortgage insurers. Issuing credit cards to consumers falls under the purview of financial institutions rather than a secondary mortgage market entity like Fannie Mae. Similarly, property appraisal is a step in the loan process but does not pert