Fannie Mae Information & Resources

In an effort to assist individuals in becoming homeowners and supporting the American housing market, the federal government began sponsoring the Federal National Mortgage Association (FNMA). Often referred to as Fannie Mae, the FNMA is a government sponsored enterprise (GSE) that purchases eligible home loans and sells them to investors. When Fannie Mae takes over a loan, they essentially absorb the risk of a mortgage loan that was initially issued by an authorized bank or a credit union. With less risk, mortgagors will be more willing to issue loans to homeowners at more affordable interest rates.

Since Fannie Mae is government sponsored, both borrowers and lenders are required to meet specific requirements before an FNMA-qualifying loan can be issued. The qualifying criteria will generally differ based on the type of loan being issued. Loans can be covered by Fannie Mae for either single-family homes or multi-family properties. Lenders and applicants have a variety of resources available such as selling guides and financial calculators. These resources can help make several steps throughout the mortgage process easier to complete. For more help navigating the mortgage process, download our comprehensive guide on Fannie Mae.

The Basics of Fannie Mae

Fannie Mae does not directly create loans for homebuyers, instead they operate as a GSE to purchase eligible loans from banks and credit unions in order to bundle them together. These loans are bundled by Fannie Mae and sold to inventors on a secondary housing market in the form of mortgage-backed securities. By purchasing these loans, Fannie Mae replenishes the funds for the lenders so that they can create more loans. This allows more homebuyers to be able to obtain a mortgage with an affordable interest rate while supporting the U.S. housing market. However, loans are required to meet certain criteria in order to be eligible to be purchased by FNMA.


Lenders are required to follow certain guidelines during the origination and underwriting processes of creating a Fannie Mae loan. Applicants for Fannie Mae loans also have requirements that they must meet. Generally, these requirements are based on an applicant’s credit score and income limits. If a lender creates a loan that does not meet FNMA standards or an applicant does not fulfill certain requirements, Fannie Mae will dismiss the application.

In addition to Fannie Mae, there is another government sponsored enterprise that also purchases mortgages in a similar way. The Federal Home Mortgage Corporation (FHMC), typically known as Freddie Mac, was launched as competition for Fannie Mae. Freddie Mac serves as protection against a monopoly in the housing mortgage market. Instead of focusing on big commercial lenders, Freddie Mac focuses more on smaller financial institutions. Homebuyers have the options of using either Fannie Mae or Freddie Mac in order to secure a mortgage at an affordable rate.

Fannie Mae Mortgages

Homebuyers who are looking to secure a Fannie Mae loan will need to take a number of steps to complete the process. The initial step is for homeowners to find a property that they would like to purchase that also meets all of Fannie Mae’s loan requirements and limits. Applicants with disabilities may receive special considerations for this step. After finding a home, applicants will need to find an acceptable lender that has the proper authorization to issue a FNMA loan. Since lenders set their own fees and interest rates, homebuyers are encouraged to shop around until they find the best offer available. In order to be eligible for a Fannie Mae mortgage, applicants must meet certain criteria based on income, credit score and down payment requirements.

Depending on whether applicants are looking to purchase, refinance or modify a home loan, the established Fannie Mae guidelines may vary. For example, applicants who would like to refinance their home can be eligible for lower interest rates depending on how much of their loan they have already paid off. Loan modifications from Fannie Mae may require applicants to provide proof of personal or personal hardship. With adequate proof of hardship, lenders will usually agree to restructure and modify existing loans. To learn more about the different application processes for Fannie Mae, download our helpful guide.

Resources for Fannie Mae Mortgage Lenders

Mortgage lenders can greatly benefit from partnering with FNMA, however they are required to meet certain guidelines before they are approved by Fannie Mae. The most important rule for Fannie Mae-approved lenders to follow is that subprime lending practices are strictly prohibited. In order to help lenders follow all of the established requirements, Fannie Mae provides them with numerous resources to help support both lenders and homebuyers during the mortgage process.

For example, lenders have access to in-depth FNMA selling and service guides that will help them to meet all of the requirements to participate. Another requirement of Fannie Mae is that all lenders are required to have the necessary licensing and their primary focus as a business must be to originate and distribute mortgage loans. Depending on what types of mortgages a lender is issuing, there may be some additional requirements from Fannie Mae.

Fannie Mae mortgages can be used to purchase either single-family or multi-family homes on the housing market. Typically, individuals and families will apply for a FNMA-backed mortgage so that they can affordably purchase a single-family home. Loans for single-family homes are the most common in the housing market and they also tend to have more basic requirements from both lenders and borrowers.

Multi-family mortgages are loans that are issued so that the applicant can fund the purchase of a multi-family housing unit. Generally, a multi-family housing unit is a property that contains multiple housing units, whether it’s an apartment complex or a few duplex properties. Depending on whether a loan is for a multi-family or single-family unit, the priorities for both lenders and borrowers can differ. This is because multi-family mortgages will almost always involve higher loan limits but shorter loan terms. Download or comprehensive guide on Fannie Mae in order to learn more about the differences between single-family and multi-family mortgages.

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