Fannie Mae Foundation: Expanded Profile
By Discover The Networks
The Federal government established Fannie Mae in 1938 in an effort to expand the flow of mortgage money by creating a secondary market. Fannie Mae was authorized to buy Federal Housing Administration (FHA)-insured mortgages, thereby replenishing the supply of lendable money. The process essentially works as described in the following example: A homebuyer borrows money (in this example, $100,000), in the form of a mortgage, from a bank. The borrower agrees that, over the life of the loan, he will pay the bank back a total of $200,000 in principal plus interest. The bank in turn sells that mortgage to Fannie Mae, which is the secondary market. Fannie Mae purchases the mortgage at a discounted price (say, $150,000), which it pays to the bank at the time of purchase. This process replenishes and expands the supply of money available for loans. This is beneficial to the bank because it no longer has to service the loan, which is a potentially expensive and laborious process (sending bills and notices, collecting monthly payments, dealing with foreclosures and the associated legal fees, etc.). The bank further benefits by having gained a customer with whom it can establish an ongoing relationship, and to whom it can sell more services in the future -- but whose mortgage it no longer has to service. Moreover, the bank may get government benefits rewarding its success in selling to homebuyers in low-income areas. For its part, Fannie Mae makes its profit by managing the purchased mortgages and collecting the payments for the remaining life of each loan (in this case, until the full $200,000 is paid back by the borrower).
In 1968, Fannie Mae became a private company operating with private capital on a self-sustaining basis. Thus it is no longer a government agency, though it continues to purchase mortgages from lenders in the same manner as it had done before. The difference is that it no longer uses government money to do so, but rather uses its shareholders' money.
In 1979, the Fannie Mae Corporation's Executive Committee established the Fannie Mae Foundation with a $600,000 seed endowment for the purpose of making charitable contributions aimed at improving the quality of life for the people of Fannie Mae's hometown, Washington, D.C. The Foundation's focus is on expanding home ownership, “especially for low-income and minority families.” The Foundation reports that as of January 2005, it had provided more than 17 million people with "free, step-by-step home-buying information to help them achieve the American dream of home ownership."
The Fannie Mae Foundation offers home-buying guides that outline the basics about purchasing and maintaining a home, borrowing money, and choosing the best mortgages for one's own circumstances. One such publication, titled the New Americans Guide, provides information on the home-buying process for immigrants in America.
The Foundation also provides homeownership education programs to help what it calls "underserved populations" gain access to affordable housing. One such course of study, titled Growing Your Money: Personal Financial Tools, provides up to 12 hours of training in such topics as "Developing a Spending Plan"; "Working with Checking and Savings Accounts"; "Understanding Credit and Your Credit Reports"; and "Getting a Loan." Another curriculum -- Building Native Communities: Financial Skills for Families -- was developed specifically “to help Native Americans … develop personal financial skills while embracing Native traditions and values.”
In a joint venture with the John F. Kennedy School of Government at Harvard University, the Fannie Mae Foundation Fellowship Program annually sponsors up to 35 fellowships for elected and appointed officials. These are three-week training programs taught by Kennedy School faculty and geared toward people interested in promoting affordable housing in the United States. Between 1995 and 2006, more than 285 local and state officials were chosen for such fellowships.
Each year the Fannie Mae Foundation hosts a Help the Homeless Walkathon, which in 2005 raised a record-breaking $7.8 million to benefit 178 Washington-area homeless service providers. Between 1988 and 2005, the annual Walkathons brought in more than $54.5 million.
Apart from the aforementioned projects, the Fannie Mae Foundation is also an important funder of leftist groups and causes. Among the recent recipients of Fannie Mae philanthropy are: the National Council of La Raza; the Tides Center; the Tides Foundation; the National Association for the Advancement of Colored People Legal Defense & Education Fund; the Mexican American Legal Defense & Education Fund; the Association of Community Organizations for Reform Now; the Children's Defense Fund; the National Urban League; and the Center for Community Change, the American Civil Liberties Union Fund of the National Capital Area; the Brookings Institution; the Urban Institute; Global Rights; Women Empowered Against Violence; the National Organization for Women Legal Defense and Education Fund; Alliance for Justice; the National Committee for Responsive Philanthropy; Planned Parenthood; the Institute for Policy Studies; the National Council of Negro Women; the National Black Caucus of State Legislators; the National Women's Law Center; the Lawyers Committee for Civil Rights Under Law; the National Alliance to End Homelessness; the Organization for a New Equality; the Congressional Black Caucus Foundation; the Southern Christian Leadership Conference; the National Association of Latino Elected Officials; the National Conference for Community and Justice; Mi Casa My House; the Center for Policy Alternatives; the Multicultural Career Intern Program; the Washington Legal Clinic for the Homeless; the National Immigration Forum; the Congressional Hispanic Caucus Institute; the African American Institute; Latin American Association; WAGES International - Womens Alliance; the National Organization on Disability; the Women's Legal Defense Fund; the Gay & Lesbian Community Action Council; the International Human Rights Law Group; the Legal Aid Society; the National Association for Public Interest Law; the National Legal Aid & Defender Association; the National Political Congress of Black Women; the Conservation Law Foundation; the Calvary Bilingual Multicultural Learning Center; Peoples Self-Help Housing; the Hacienda Community Development Corporation; Equal Justice Works; East L.A. Community Corporation; the Center on Budget and Policy Priorities; the Lao Family Community Development; the Resurrection Project; the League of African-American Women; the Black Womens Agenda; the See Forever Foundation; the Cesar Chavez Public Policy Charter High School; the Coalition for the Homeless; Social Compact; Proyecto Azteca; the Greenlining Institute; the Empowerment Foundation; the National Fair Housing Alliance; Earth Conservation Corps; the New York Immigration Committee; the Progress and Freedom Foundation; the Center to Prevent Handgun Violence; the Alliance for Fairness in Reforms to Medicaid; the Green Institute; Parents, Families, & Friends of Lesbians & Gays; the Council of Latino Agencies; the Citizenship Education Fund; the District of Columbia Appleseed Center for Law and Justice; the Empowerment Network Foundation; the Conservation Fund; Catalyst for Women; Demos: A Network for Ideas and Action; the African American Women's Resource Center; and the AIDS Action Foundation.
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