The Federal Loan Mortgage Corporation, also known as Freddie Mac is a government sponsored enterprise. Like the larger Fannie Mae, it is not a government entity, but an enterprise. Freddie Mac was created in 1970 to help create a stronger lending environment by insuring, or buying mortgages on the secondary market from banks and lending institutions. This allows the banks to take their money and assets and lend to other borrowers. Freddie Mac takes the mortgages and bundles them together for sale as mortgage backed securities.
Fannie Mae and Freddie Mac insure, back, buy most of the loans today and bundle them up for sale as mortgage backed securities.