The U.S. government takes over Fannie Mae and Freddie Mac. Fannie Mae (est. 1938) and Freddie Mac (est. 1938) were government backed entities that bought mortgages from banks and repackaged them into securities and sold these to investors. After selling the mortgage it had just made to Fannie (retail banks) or Freddie (smaller banks), a bank’s money was freed up to lend again; with the added capital into the system, banks could lend to more people and at easier terms (for example creating the popular 30-year mortgage), which put buying a home within reach for the lower and middle classes.