I didn't mean to overlook this subject. From your comments I may have been mistaken to assume that you know how FNMA works. It doesn't "suck" money from taxpayers; it's a self-sustaining operation.

Private lenders make mortgage loans, not FNMA. Periodically lenders bundle up their mortgage portfolios and sell them to FNMA, which returns capital that they can turnaround and loan out immediately, rather than waiting for maturity of older loans. FNMA in its turn aggregates mortgage portfolios, and sells mortgage-backed securities--stock backed up by the mortgage portfolios and the value of the real estate they represent. The return on those securities provides the ultimate investors with a steady trickle of dividends. Risk management procedures evaluate the creditworthiness of individual lenders and attempts to set intererst rates for individual loans such that, on average, losses due to foreclosure and fraud are covered.

An operation like that requires seed capital to get started, but once in operation, it's self-sustaining and usually even turns a modest profit, which is distributed to private investors. This is a good example of an "instrumentality" that could only be created by a government, but once set in motion is not sustained by law or force, but by voluntary and beneficial cooperation between lenders, the agency, and investors. It can fairly be said that everybody profits from FNMA's operations.

Note too that the existence of FNMA hasn't killed off purely private capital in real estate. There's a segment of the mortgage industry based solely on private lending ("hard money", I believe it's called) in which the lender is lending his/her/its own money and retains the paper instead of selling it to FNMA. Private lending is much more prevalent in commercial real estate.