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In 1968, the Federal National Mortgage Association was partitioned into two separate entities—one wholly owned by the government and known as the Government National Mortgage Association (Ginnie Mae), and the other to retain the name Federal National Mortgage Association (Fannie Mae). At this time Fannie Mae expanded its charter to buying other sorts of mortgages besides the government insured ones it had traditionally purchased.
Today, Fannie Mae is a consistently profitable American corporation. While it receives no direct government funding or backing it has certain looser restrictions placed on its activities than normal financial institutions. For example, it is allowed to sell mortgage backed securities with half the capital backing them up than is required by other financial institutions. Critics, including Alan Greenspan, say that this is only allowed because investors seem to think that there is a hidden, or implied, guarantee to the bonds that Fannie Mae sells [1]. Although the company describes them as having no guarantee, nevertheless the vast majority of investors believe that the Government would prevent them from defaulting on their debt, and so buy bonds that are very low interest rates compared to the risk.
Because of its stake in the mortgage market and because of its history, Fannie Mae (along with Federal Home Loan Mortgage Corporation (Freddie Mac)) sets the limit each year on the size of a conforming loan based on the October to October changes in mean home price, above which a mortgage is considered a jumbo loan, and has higher rates associated with it. This is because both Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market, making the demand for non-conforming loans much less. By virtue of the laws of supply and demand, then, it is harder for lenders to sell the loans, thus it would cost more to the consumers (typically 1/4 to 1/2 of a percent.) The conforming loan limit is 50 percent higher in Alaska, Hawaii, Guam and the US Virgin Islands.
Fannie Mae recieved a 71% rating in the the 2004 Corporate Equality Index by the Human Rights Campaign. Additionally, the company gave a $50,000 grant to the anti-GLBT organization Traditional Values Coalition in 2001 to "to train church leaders to provide homeownership education in the Greater Los Angeles area."