Legislation in the United States that created
Freddie Mac, a federally chartered company that
guarantees mortgages granted to low- or middle-income households. The Act came about as a result of pressure to provide
competition to
Fannie Mae, which is another federally chartered company that does much the same thing. There was concern in the
investment community that without this competition, government guaranteed mortgages would
crowd out the
market, which would be detrimental to non-guaranteed mortgages. Both Freddie Mac and Fannie Mae were put in federal
receivership in 2008.