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FNMA Conforming loan guidelines

Fannie Mae and Freddie Mac Explained  November 14, 2013 – 03:20 am

2012 loan limit amounts for Massachusetts and New Hampshire

What are Fannie Mae and Freddie Mac Loans?

The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) are both Government Sponsored Enterprises (GSEs),which means they are backed by the government but they are not part of the government. Fannie Mae and Freddie Mac don’t directly offer mortgage loans but instead buy the mortgages from banks,credit unions,and other financial institutions so that they,in turn,can lend to more homeowners. Even after the mortgage is sold,the original lender can often still be the servicer for the loan.

What Are the Requirements for Fannie Mae and Freddie Mac Loans?

Fannie and Freddie purchase bundles of these conforming mortgage loans from banks,which means the loans must “conform” to the rules set by the GSEs.

Lenders want these mortgages to be eligible for purchase,so their loan guidelines are often very similar,if not identical,to guidelines set by Fannie and Freddie. So when you apply for a mortgage loan at a bank,it’s a good idea to know what these guidelines are.

One factor that determines your eligibility is your debt to income ratio. To calculate your debt to income ratio take your total debt payment and divide it by your total monthly income. For example,if you have a total monthly debt of $2, 000 and a monthly income of $6, 000,your debt to income ratio is 33%. Current guidelines allow a debt to income ratio up to 45%.

Credit Score for Fannie Mae and Freddie Mac

Fannie /Freddie loans require a minimum FICO credit score of 620 to qualify,but the approval process for applicants with credit scores between 620 and 660 may take longer than higher scores.

For Fannie/Freddie loans you may need to put 20% down on a home,but there are a few exceptions.Fannie Mae does offer a low down payment option available for properties owned by Fannie Mae called the HomePath loan. It allows a borrower to purchase a Fannie Mae-owned property with as little as 3% down. Fannie Mae also offers a program for borrowers who purchase a property in need of moderate renovation called the HomeStyle Renovation loan. The loan is for the purchase and the cost of renovations and also offers a down payment as low as 3% (no mortgage insurance with 20% down). It is available for the purchase of a primary residence,a second home,or investment property.

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Required Down Payments

The current minimum down payment for a Fannie Mae or Freddie Mac Loan,which are commonly referred to as conventional loans,is 5% of the purchase price. But there are programs available on a much more limited basis that allow for 3% down,such as Fannie Mae’s Homepath and My Community mortgage products. Many potential home owners think that 20% down is the only option when buying a home,unfortunately that is just a common misconception,there are many options out there. In most cases with a Fannie Mae or Freddie Mac loan you can even avoid paying expensive monthly PMI (Private Mortgage Insurance) if you’re working with the right Mortgage Lender. Generally this consists of a slight increase in your interest rate,but results in a significantly lower monthly payment. Additionally,with this option you can roll the closing costs into your offer and have the seller contribute towards them or ask the Lender to offer you an option in which they pick up the tab on the closing costs. This will reduce the money needed by the borrower to just the 5% down payment contribution. A buyer can qualify for all these options with less than perfect credit. The 5% down options are restricted to buying a primary residence and single family home with a conventional mortgage.

Source: www.mlrealtyne.com

How to fill out a Freddie Mac-Fannie Mae residential appraisal report (FHLMC form 70-FNMA form 1004): [including complete FNMA official instructions] (Harrison's illustrated guide)
Book (Collegiate Pub. Co)

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We don't disagree tremendously, just on a few

Of the specifics and terms.
FNMA and Freddie 95% SISA between 2005-2007, any link to back that up? What I know, from my working in the "front end", i.e. with buyer finding loans, is that FNMA and Freddie didn't make these type loans. They may have bought them from "portfolio" lenders but a Fannie/freddie loan has always meant "conforming" or meeting the rules. Their rules always included d...lose!"
As for why the FED is buying MBS, its to get the credit markets moving again. When the FED, or anyone for that matter, buys MBSs that frees that money for further lending. When lenders stopped buying from each other once they found out they could lose afterall, someone had to step in. Since the FED is owned by its member banks, it almost seems like a good idea that they do buy them.

Why A Three Percent Home Down Payment Is A Recipe For Disaster  — Forbes
What to do now that those higher mortgage rates will prevent, even with all the goofy government programs doing contortions, even a magician from qualifying the unqualified? Old habits are apparently hard to ..

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