Tennessee Real Estate Exam Practice Question
Which of the following is a government-sponsored secondary mortgage market entity?
Correct Answer: B
Rationale: Fannie Mae (FNMA) is a government-sponsored enterprise that plays a crucial role in the secondary mortgage market by purchasing mortgages from lenders, thereby providing liquidity and stability.
The Federal Housing Administration (FHA) primarily insures loans but does not operate in the secondary market. The Veterans Administration (VA) guarantees loans for veterans, focusing on direct lending rather than secondary market activities. The Farmers Home Administration (FmHA) provides loans to rural areas but does not engage in secondary mortgage market functions. Thus, only Fannie Mae fulfills the criteria of a government-sponsored secondary mortgage market entity.
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