Freddie Mac specializes in which type of loans?

Freddie Mac, or the Federal Home Loan Mortgage Corporation, plays a crucial role in the secondary mortgage market by purchasing and guaranteeing conventional loans. This means that it primarily deals with mortgages that are not insured or guaranteed by a government entity. Conventional loans often require a higher credit score and a larger down payment compared to government-backed loans, which include FHA and VA loans that are specifically designed to assist certain borrowers, such as first-time homebuyers or veterans.

Freddie Mac's involvement allows lenders to maintain liquidity by selling these loans, thus enabling them to offer more loans to consumers. Their focus on conventional loans underscores their objective to enhance the housing market while promoting affordable homeownership options. This makes the choice of conventional loans the correct answer to the question about Freddie Mac’s specialization.