Which agency is not a federally established secondary mortgage institution?

• A. Federal National Mortgage Association
• B. Veterans' Administration
• C. Federal Home Loan Mortgage Corporation
• D. Environmental Protection Agency

Answer: (D)

Secondary mortgage institutions exist to buy mortgages from lenders and supply funds back into the lending system, keeping the mortgage market liquid. Fannie Mae and Freddie Mac are classic examples of federally chartered entities built specifically to operate in that secondary market, providing the liquidity lenders need.

The Veterans Administration functions as a federal agency that supports mortgage financing through loan guarantees to veterans. While it influences housing access, it is not itself a secondary mortgage market purchaser.

The Environmental Protection Agency, on the other hand, is focused on environmental protection and does not participate in mortgage financing or the secondary mortgage market at all. That's why it is not a federally established secondary mortgage institution.