Fannie Mae Mortgages
In a sense, Fannie Mae mortgages are an oxymoron, because this government-sponsored enterprise doesn't actually originate real estate loans. Instead, Fannie Mae and Freddie Mac buy loans through the secondary mortgage market so they can be sold to investors in the form of mortgage-backed securities.
Fannie Mae mortgages account for approximately 50 percent of all real estate loans that originate in the U.S. The combined mortgage portfolio of Fannie Mae, and her little brother, Freddie Mac are estimated at around $6 trillion.
The Federal Reserve limits the number of home mortgage loans that banks can hold. To free up credit limits, Fannie Mae buys these loans, packages them up, and resells them to investors.
Fannie Mae has been helping homeowners achieve the American Dream of homeownership since 1938. The enterprise was originally created at the request of President Franklin Roosevelt to expand affordable housing opportunities.
In 1968, Fannie Mae became a private company owned by shareholders. For the next 40 years, Fannie Mae was instrumental in increasing homeownership. The enterprise reaped massive profits until they nearly became insolvent in 2007 due to an overabundance of subprime investments.
In September 2008, both Fannie Mae and Freddie Mac were taken over by the U.S. government and placed into conservatorship and managed by the Federal Housing Finance Agency.
The government infused billions of taxpayer dollars to keep Fannie Mae and Freddie Mac afloat. Although the bailout is a volatile subject, if these entities had failed our economy would be worse than it is. However, what concerns Americans is the fact the government has agreed to infuse unlimited funding to ensure these GSEs don't fail again.
We can only hope Fannie Mae will return to its original mission statement of "serving America's families and the housing market." Although the market is unpredictable, there has never been a better time to buy a house.
First time home buyers and investors can take advantage of discount-priced foreclosure homes offered through Fannie Mae's Homepath. This program offers residential homes that include foreclosures, short sale houses, and properties returned via deed in lieu of foreclosure.
Buyers can apply for financing through Home Path Mortgage and receive special discounts and low interest rates. One appealing aspect of this program is the low down payment requirement of 3 percent.
Other Fannie Mae loan mortgage programs are in place to help homeowners avoid foreclosure through loan modifications, mortgage refinance, or deferred payments. Fannie Mae developed KnowYourOptions.com to help homeowners learn about options to stay in their home or leave their home.
While there is a high level of animosity toward Fannie Mae, they aren't likely to disappear. Considering this entity holds over half of U.S. mortgages, chances are you're eligible for one of their programs.
Whether looking to buy a house, purchase investment real estate, or find solutions for getting back on track or out from under mortgage obligations, Fannie Mae programs are a good place to start.
We invite you to learn more about Fannie Mae mortgages, conventional mortgages, and ways to buy houses with creative financing in our home buying article library. We have hundreds of articles to help people learn ways to buy a house, prevent foreclosure, and learn about available government-sponsored programs.