Loans that comply to the “secondary market” are important to mortgage application success. Mortgage lenders who originate the mortgage loan are considered the “primary market.” However, there is also a “secondary” mortgage market where lenders sell mortgages to a variety of investors.
 
The Federal National Mortgage Association (FNMA) is also known by the name “Fannie Mae.” The Federal Home Loan Mortgage Corporation (FHLMC) is referred to as “Freddie Mac”. They are both creations by acts of congress for the purpose of providing a flow of mortgage money in what is called the secondary market.
 
Both entities are stockholder-owned corporations chartered by Congress to help mortgage lenders in support of home ownership. This is achieved when they buy loans from lenders, usually as part of a “pool” of mortgages, and sell them through issuance of mortgage-backed securities to investors such as insurance companies, securities dealers, pension funds, other financial entities, etc.
 
Specific borrower quality and loan terms make the mortgage “pools” favorable to the investors and, in turn, their money replenishes the lender’s funds to be made available for your new home.
If, after closing, your loan is included in such a pool, your mortgage rate and terms will not change but, you will start making your payments to a new financial institution.