In today's current housing market, some economists and political figures are arguing for the dismissal of two of the nation's largest Government-Sponsored Enterprises and housing facilitators, Fannie Mae and Freddie Mac. Due to the current economic crisis, policy changes to facilitate the housing market need to be considered. This study does not argue for their dismissal or change of their structural form, instead it focuses on their role in the mortgage market and their relationship with homebuyers. It will examine the role of the secondary mortgage market and the effect GSE purchases have on the accessibility to credit. The hypothesis to be tested is that Government-Sponsored Enterprises make mortgage credit more accessible to homebuyers, therefore increasing homeownership. The model will use aggregate level data from the census tract level to show what effect increased Fannie Mae and Freddie Mac purchases have on the chance the bank denies the applicants loan. The results indicated that Fannie Mae and Freddie Mac failed to reject the null hypothesis that they lead to a greater chance of loan approval, which can lead to a greater accessibility to credit.


Burnell, Jim


Business Economics

Publication Date


Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis



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