Fannie Mae and Freddie Mac are huge financial institutions that buy mortgages and bundle them into securities that behave like bonds. Then they sell the mortgage-backed securities to investors.

When You get a loan, the lender sells the loan on a secondary market, often the buyer is Fannie Mae or Freddie Mac. By Selling the mortgage the lender gets its money quickly so it can lend the money again to another buyer.

More info at and Freddie Mac.