What is the difference between Fannie Mae and Freddie Mac and what does it mean to you?
By Dottie Spitaleri
19 Apr, 2022
Fannie Mae and Freddie Mac are both government sponsored enterprises that buy and sell home loans on the secondary market. They are both regulated by the Federal Housing Finance Agency. Fannie Mae buys from larger commercial banks w.as Freddie Mac buys their loans from much smaller banks. The two helps make affordable financing available to home buyers by providing mortgage lenders with liquidity. Both entities must be conforming loans meaning they must meet certain criteria standards for it to be eligible for purchase by Fannie Mae and Freddie Mac. These requirements include credit scores, debt to income ratios, loan to value and several other factors. The loan amount must meet the conforming loan limit set forth by the agencies. These loan limits do change year to year. The limit for 2022 is set at $647,200.00 and are higher in certain high-cost areas. If your loan amount is higher than what is set, then your loan will fall into a Jumbo loan which is not a conforming loan and has different guidelines that need to be met. What does this mean for you? They both create affordable financing options. They promote competition in the market meaning competitive rates and competitive loan requirements. One or the other may have more leniency in one area or the other which makes it possible to obtain financing depending on your needs. No one buyer is “cookie cutter”, everyone has a unique financial footprint, and this is w. the differences in these two enterprises come into play. Please call me for a free consultation at 727-543-1753 or visit ddamortgage.com/Dottie for more .rmation. Dottie Spitaleri NMLS# 224169