Freddie Mac and Fannie Mae Home Loans – The Basics
If you are looking to purchase a home, then you have likely already heard of Fannie Mae home loans, as well as Freddie Mac. They aren’t direct lenders; however both of them directly affect the ease with which Americans can buy houses. Lenders actually get funding from them when they purchase mortgage loans in which the lenders have given out. They then put them into securities packages and sell them to investors. They use the money they make to buy more mortgages and repeat the process. This is how lenders end up having the money to give out loans to those purchasing homes.
When Fannie Mae home loans and Freddie Mac put their money into the mortgage market they make it easier for more people to purchase homes. It used to be that the only money that banks had was the money from the people. This meant that the amount of money the banks had depended on the area. With these two institutions getting involved, things are a bit more level. Interest rates are also lower due to their involvement.
Fannie Mae home loans actually began back in 1938 when it was founded by Congress. Even though the government oversees their doings, they went private in 1968. Fannie Mae home loans has a motto that states: “We are in the American Dream business.”
Fannie Mae is the second largest company in the Unites States when it comes to assets. Furthermore, they provide the most money for mortgages in the entire country.
They give the market fresh capital and make it easier to own a home. They have a program that they offer which only requires that interest be paid on the mortgage for ten to fifteen years. There is an additional program for people who have a less than perfect credit rating which helps them qualify to purchase a home. There is another program that helps people get a home with a fairly small amount of money down. They also have a program called Payment Power. This program is great because it will allow two payments to be skipped in a year, and ten payments throughout the entire period of the loan. First time homebuyers love these programs.
Just like Fannie Mae home loans, Freddie Mac buys resale mortgages. It is also owned by shareholders while being government regulated. Freddie Mac is the fiercest competitor of Fannie Mae home loans. There are also many programs offered by Freddie Mac via their lending partners. They offer a mortgage with a zero down payment, one with a low down payment as well as a mortgage for people who have yet to build a credit history.
Freddie Mac has had a part in over 41 million home purchases in America. There are also millions of people who have experienced lower interest rates due to Freddie Mac’s help.
With the combination of Fannie Mae home loans and Freddie Mac, more and more people are able to purchase homes, and this is no doubt a blessing in more ways than one can imagine.
Next, find out more about Fannie Mae Loans in the best specialized website available on such delicate topic.
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