Not only is the federal government in the mortgage business with Fannie Mae and Freddie Mac, they have a sister, Ginnie May. All three "companies" do essentially the same thing: buy mortgages from banks (i.e., supply banks with money) and bundle the mortgages up into a security instrument that is then resold to investors. Their "value-add" is the backing, real or implied, of the US Government--read taxpayers--so that if the mortgages are not repaid, then the Government will cover the losses.
Since I cannot explain a good reason why the Government is in the mortgage business, I surely cannot explain why they created not one but three distinct entities with about 95% overlapping missions.
Ginnie Mae was split off of Fannie Mae when Fannie Mae was recharted in 1968.
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