Fannie Mae and Freddie Mac are the biggest supplier of mortgage funds in the US.A large number of conforming loans are bought and serviced by Fannie Mae and Freddie Mac.
Though Fannie and Freddie loans may offer the best rates, they are the most stringent around. If you have a unique situation it may be better to consider other options. Your loan officer can best describe these alternatives.
Fannie Mae is a privately-owned corporation authorized to make loans and loan guarantees. Fannie Mae is not backed or funded by the U.S. government, nor do the securities it issues benefit from any explicit government guarantee or protection.
Fannie Mae and Freddie Mac both offer programs to those with less than perfect credit as well. There is generally a pricing adjustment for such "just missed" loans.
Fannie Mae is also referred to, as FNMA. FNMA stands for Federal National Mortgage Association Freddie Mac is also referred to, as FHLMC. FHLMC stands for Federal Home Loan Mortgage Corporation. Freddie Mac and Fannie Mae both buy mortgages on the secondary market. This allows lenders to keep originating new mortgage loans constantly because Freddie and Fannie keep buying the mortgages from them, or from the primary market. An example of this is: You buy a home and obtain a mortgage from Bank A, Bank A is considered the primary lender, or the primary market, Bank A then sells your mortgage to Fannie or Freddie on the secondary market and this allows Bank A to have those funds available once again to give another homeowner a mortgage.
Fannie Mae and Freddie Mac computerized and simplified the loan underwriting process with the introduction of two automated underwriting systems. Freddie Mac's Loan Prospector and Fannie Mae's Desktop Underwriter revolutionized the mortgage industry by reducing the loan risk assessment process down to minutes rather than weeks.
