Short answer. Freddie Mac (Federal Home Loan Mortgage Corporation, FHLMC) is a government-sponsored enterprise (GSE) that purchases conventional mortgages from lenders and securitizes them. Chartered in 1970, it has been in federal conservatorship since 2008.
Freddie Mac was created by Congress in 1970 to provide secondary-market liquidity for conventional (non-FHA/VA) mortgages — complementing Fannie Mae's role and breaking up what was effectively a Fannie Mae monopoly on conventional secondary-market activity.
The 1970 charter
The Emergency Home Finance Act of 1970 created Freddie Mac with an initial mandate to buy conventional mortgages from member institutions of the Federal Home Loan Bank System (primarily savings and loans). This was a critical structural change: it gave S&Ls — which had been holding most U.S. mortgages on their balance sheets — an outlet to sell loans rather than fund them through deposits.
The first MBS
Freddie Mac issued the first conventional mortgage-backed security in 1971 — a Participation Certificate (PC) backed by a pool of conventional 30-year fixed-rate mortgages. The PC structure became the modern template: investors share in pro-rata principal-and-interest cash flows from the underlying mortgages.
The PMMS — Primary Mortgage Market Survey
Freddie Mac's Primary Mortgage Market Survey, launched in 1971, is the dominant U.S. mortgage-rate index. It surveys approximately 100 lenders weekly to compute the average 30-year fixed-rate mortgage rate. The PMMS series — running 1971 to today — is the dataset behind virtually every reference to "U.S. mortgage rates" in news and research.
The 2008 conservatorship
Freddie Mac was placed in FHFA conservatorship on September 7, 2008, alongside Fannie Mae. The Treasury injected $71 billion in capital. Both GSEs have since returned to profitability. They remain in conservatorship as of 2024, with various bills proposing release-from-conservatorship pending in Congress.
Sources
U.S. Census Bureau Survey of Construction; National Association of Realtors Existing Home Sales report; Freddie Mac Primary Mortgage Market Survey; National Bureau of Economic Research Business Cycle Dating Committee.