Ace the Arizona Real Estate Exam 2026 – Unlock Your Property Dreams!

Fannie Mae operates primarily in the secondary mortgage market. This market is where existing mortgages are bought and sold between lenders and investors, which helps provide liquidity to the housing market. By purchasing loans from lenders, Fannie Mae enables those lenders to have more funds available to issue new mortgages. This process promotes stability and affordability in the mortgage industry by ensuring that lenders can continue to offer loans to homebuyers.

In contrast, the primary mortgage market is where loans are originated, meaning it is the point at which borrowers apply for and receive loans directly from lenders. Loan origination refers specifically to the initial creation of a mortgage loan, and the Federal Reserve market relates more to overarching monetary policy and financial systems rather than specific mortgage transactions. Therefore, while those options pertain to the broader context of mortgage availability and funding, Fannie Mae's specific role is defined within the operations of the secondary mortgage market.