Introduction to FNMA & FHLMC

The mortgage industry plays a vital role in facilitating homeownership by providing individuals and families with the necessary funds to purchase their dream homes. FNMA (Federal National Mortgage Association), also known as Fannie Mae, and FHLMC (Federal Home Loan Mortgage Corporation), commonly referred to as Freddie Mac, are two significant institutions that support the mortgage market in the United States.

FNMA and FHLMC are government-sponsored enterprises (GSEs) created by Congress to promote stability and liquidity in the housing market. Their primary objective is to enhance the availability and affordability of mortgage credit for homebuyers. FNMA and FHLMC achieve this by purchasing and guaranteeing mortgage loans originated by lenders, thereby freeing up capital for lenders to provide more loans to borrowers. These institutions also provide a secondary market for mortgage loans, which helps ensure a steady flow of funds into the mortgage market.

FNMA and FHLMC mortgage loan programs generally require mortgage insurance for loans with a loan-to-value (LTV) ratio above 80%. Mortgage insurance protects the lender in case the borrower defaults on the loan. However, FNMA and FHLMC mortgage insurance requirements may be different from those of other mortgage loan program types.

The guidelines and requirements by FNMA and FHLMC can be found on their respective official websites:

1. Fannie Mae (FNMA): Website: https://www.fanniemae.com/ The guidelines and resources provided by FNMA can be found under the "Lenders" or "Single-Family" sections of their website. They offer various resources, including the Selling Guide, servicing guides, underwriting guidelines, and other publications that provide detailed information on FNMA's loan programs, eligibility requirements, underwriting criteria, and servicing requirements.

2. Freddie Mac (FHLMC): Website: http://www.freddiemac.com/ FHLMC offers comprehensive guidelines and resources for lenders and mortgage professionals. You can find them under the "Selling/Servicing" or "Single-Family" sections of their website. The resources include the Single-Family Seller/Servicer Guide, underwriting guidelines, eligibility matrices, and other helpful documents that outline FHLMC's loan programs, requirements, and processes.