Federal Home Loan Mortgage Corp (Freddie Mac) buys residential and multifamily mortgages from banks and other lenders, packages them into mortgage-backed securities (MBS), and sells those securities to investors — guaranteeing payment even if borrowers default. It makes money primarily through guarantee fees charged for that credit protection, and through the net interest spread on mortgages it holds on its own balance sheet. Customers are mortgage lenders (banks, credit unions, mortgage companies) who sell loans to Freddie Mac to replenish their capital, and investors who buy the MBS it issues. It operates under a federal conservatorship and carries an implicit U.S. government backstop. The single-family mortgage business generates the large majority of revenue.