Which corporation is primarily established to purchase conventional mortgage loans in the secondary mortgage market?

Freddie Mac is primarily established to purchase conventional mortgage loans in the secondary mortgage market. This corporation, officially known as the Federal Home Loan Mortgage Corporation, was created to provide liquidity, stability, and affordability to the U.S. housing market. It does this by purchasing mortgages on the secondary market, which allows lenders to free up capital to issue more loans. Freddie Mac plays a key role in expanding the availability of mortgage credit and promoting home ownership, particularly for conventional loans that conform to specific underwriting criteria.

In contrast, Fannie Mae also purchases conventional loans but is distinct from Freddie Mac and operates under different guidelines. HUD is a government agency that oversees various housing programs and does not primarily engage in the purchasing of mortgage loans, while Ginnie Mae focuses on government-backed loans such as those insured by FHA, VA, or USDA. These distinctions are critical in understanding the roles of different entities in the housing finance system.