Fannie Mae

Fannie Mae was founded in 1938, and since that time has financed more than 63 million low-, moderate- and middle-income families with home loans. It was established by the federal government to increase the flow of mortgage money into the economy: Fannie Mae was authorized to purchase FHA backed mortgages. The comany works with lenders to ensure that home loans are available to the broadest spectrum of buyers. Fannie Mae was privatized in 1968, and has expanded its acquisition of loans beyond FHA insured mortgages.

The company continues to operate under a Congressional charter, with a mandate to ensure a supply and affordability of housing for low-, moderate- and middle-income Americans. Fannie Mae is one of the nation’s largest taxpayers. Fannie Mae buys loans from lenders that meet its loan limits; from $417,000 for a one-family loan to $801,950 for a four-family loan, and $208,500 for a second mortgage. Buying these loans from primary lenders allows the lenders to generate more loans to new buyers.

Fannie Mae also generates Mortgage Backed Securities, which are traded on the New York Exchange. These securities allow investors to hold liquid securities, again making more funds available to borrowers. Fannie Mae uses current technology to provide lenders nationwide access to faster and more affordable approvals for their customers.

Loans backed by Fannie Mae:

  • Fixed-rate mortgages
  • Adjustable-rate mortgages
  • Low and no-down payment mortgages
  • Home improvement mortgages
  • Reverse mortgages for seniors
  • Loans for people with disabilities
  • Native American loans
  • Rural housing loans; higher income limits, and special rural appraisal guidelines for areas outside metropolitan areas
  • Seven year balloon mortgages
  • Energy Efficient mortgage
  • Construction to permanent mortgage
  • Refinancing loans

As part of its commitment to accessible and affordable homeownership for every American, Fannie Mae has made available over $3 trillion to minority and underserved families. In 2000 the company began its decade of “American Dream Commitment,” with a goal of helping 6 million American families become homeowners. This goal will increase the rate of minority homeownership from the current 51% to 55%, closing the gap between minority and non-minority homeownership. The company has formed a partnership with the National Association of Home Builders to target the revitalization of 1000 communities across the United States. They also work with local lenders to create community-based lending opportunities. They also work with partners to provide mortgage and homeownership education to new homebuyers.

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