Fannie Mae and Freddie Mac reduce the costs of borrowers, who meet the underwriting requirements of the agencies, and who need loans no larger than the largest mortgage the agencies are allowed by law to purchase. For 2006 the maximum is $417,000. It is raised every year in line with increases in home prices.There is no company in America, taking bigger strides or that is more committed to providing lending for the purpose of expanding minority homeownership.
Insist that your mortgage professional make an effort to get a Fannie Mae automatic underwriting approval, even if the loan will most likely be rejected. Many less ethical mortgage companies sell only Subprime products and may therefore put many conventional, conforming borrowers into over-priced loans. Fannie Mae's automatic underwriting will issue a denial with some of the specific reasons your loan has been rejected. This is useful, especially if it is due to a clerical mistake or omission.
The Conforming Loan limits set by FNMA (Federal National Mortgage Association) for 2006 is $417,000 for single family residence, $533,850 for duplex, $645,300 for triplex, and $801,950 for quads. Hawaii and Alaska have Conforming loan limits 1.5 times higher than the continental U. S. Mortgages with loan amounts higher than the conforming limits set by Fannie Mae are referred to as "Jumbo Loans".
These loans offer the best rates for borrowers. You do not need perfect credit to qualify and they also will take very high debt to income ratios, sometimes as high as 65%.
Loans that meet the guidelines set forth by Fannie Mae and Freddie Mac are known as conforming loans.
The Federal National Mortgage Association, Fannie Mae (FNMA) which was chartered by congress, is a shareholder-owned company that is the biggest supplier of mortgage funds.
Conforming loans that are sold to Fannie Mae and Freddie Mac are usually offered by lenders at the most attractive rates and terms on the market. One term that conforming loans normally do NOT have is a Pre Payment Penalty which keeps borrowers from being "stuck" in their mortgage.
More Americans own homes today than at any other time in history. Fannie Mae works to expand homeownership opportunities by joining with lenders and community partners to create products to reach communities so that more people can own their own homes.
Fannie Mae has an automated underwriting engine that allows a lender to input a borrowers credit and application and get an approval instantly. This approval will list the conditions and documentation that the lender will need to provide in order for Fannie Mae to buy the loan.
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