Fannie Mae and Freddie Mac are the two Government Sponsored Enterprises (GSE) that are in charge of implementing mortgage guidelines for Conventional Loans. Borrowers need to meet Fannie Mae and Freddie Mac Guidelines to qualify for Conventional Loans. This is because they need to conform to Fannie Mae and Freddie Mac Guidelines. Conventional Loans are called Conforming Loans. HUD Versus Fannie Mae And Freddie Mac Guidelinesįannie Mae and Freddie Mac set the agency mortgage guidelines on Conventional loans.Fannie Mae And Freddie Mac Guidelines On Debt To Income Ratio.Conventional Loans After Bankruptcy And Foreclosure.Fannie Mae And Freddie Mac Guidelines On Credit Scores.HUD Guidelines Compared To Fannie Mae And Freddie Mac Guidelines.
Conventional loans are referred to as Conforming Loans. It is mainly because Fannie Mae and Freddie Mac lenders can have liquidity and originate and fund many loans. This is how Fannie Mae and Freddie Mac provide liquidity in the mortgage markets. After Fannie Mae and/or Freddie Mac purchases the loan on the secondary market of the mortgage banker, the mortgage banker can then pay its warehouse line of credit and originate and fund more loans. After the loan is funded, lenders need to sell the loans on the secondary mortgage market. Lenders use their warehouse line of creditto fund loans. The way Fannie and Freddie provide liquidity in the mortgage markets is by purchasing conforming loans lenders originate and fund. The role of Fannie Mae and Freddie Macis to provide liquidity in the mortgage markets. This is why conventional loans are often referred to as conforming loans.įannie Mae and Freddie Mac will not purchase any loans that do not conform to their agency mortgage guidelines. Fannie Mae and Freddie Mac only buy loans that conform to their agency mortgage guidelines. Fannie Mae and Freddie Mac are the two mortgage giants that are the biggest buyers of mortgage loans on the secondary mortgage market. However, lenders make sure all conventional loans they originate and fund meet Fannie Mae and/or Freddie Mac Agency Guidelines. They are not insured and/or guaranteed by any government agency like FHA, VA, USDA loans. This Article Is About Fannie Mae And Freddie Mac Guidelines On Conventional Loansįannie Mae And Freddie Mac Guidelines: Conventional loans are not government-backed mortgages.