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About Fannie Mae
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Established in 1938, Fannie Mae is a well-known name in the mortgage industry. It’s a government-sponsored enterprise that does not originate loans, but rather purchases loans directly from banks and lending institutions. It also provides mortgage products that lenders can offer to the public. Fannie Mae is still under conservatorship with the Federal Housing Finance Agency after a near financial collapse in 2008.
Pros & Cons
- Creates opportunities for affordable housing
- Low-down-payment options
- Refinance products available
- Mixed reviews on its HomePath properties
- Products can be confusing to navigate
While not a direct mortgage lender, Fannie Mae works with lenders to provide affordable options for homeownership.
Top Fannie Mae Reviews
Fannie Mae can be a cumbersome loan process, but they do provide quality service upon completion. They are very tedious about the documentation needed, as most are, but they're ov...Read full review
I refinanced with Fannie Mae through my credit union but so had many other people. It took over 90 days but in the end it saved me almost $200. Easy to sign all the final papers. ...Read full review
Lenders set your rate based on your creditworthiness and the lending market at the time. Knowing the current mortgage rates can help you decide if a loan offer is a good deal or if you need to check your rate with a different lender.
Personal factors that determine your mortgage rate include:
- Your credit score: Borrowers with higher credit scores generally get lower annual percentage rates (APRs) on their loans. Many lenders will reject your loan application if your score is under 620.
- Your down payment: Minimum down payment requirements vary, but making a larger down payment can earn you a lower rate from many lenders.
- Your loan term: Shorter-term loans usually have lower interest rates.
- Your type of loan: Lenders often provide different rates for different types of loans, so it’s a good idea to check out all the loan options available to you.
Before you schedule a tour of your dream home, make sure you know how to get a mortgage. While the mortgage application process will look slightly different depending on the lender you choose, you can ask your real estate agent or lender about how to take advantage of one of these Fannie Mae offerings:
- Affordable housing options: Through Fannie Mae’s HomePath program, homebuyers have the opportunity to purchase homes owned by Fannie Mae.
- Rent history assessment: One of the tools Fannie Mae offers to its lending partners is Desktop Underwriter. This underwriting system evaluates a loan applicant’s 12-month rent payment history (and other factors) to help the lender confirm whether it’s safe to loan them money.
- 3% down options: First-time and repeat homebuyers can qualify for down payments as low as 3% on a Fannie Mae’s HomeReady mortgage when they complete a homeownership education course. Fannie Mae’s HFA Preferred loans can also come with low down payment requirements.
Fannie Mae offers home products to lenders that you might be able to take advantage of, even though you will not be able to receive a home loan directly from Fannie Mae. Ask your lender if you qualify for one of these popular programs:
- HomeReady: A low down payment loan option for creditworthy, low-income buyers.
- HomeStyle Renovation: A mortgage that allows buyers to finance renovations through their home purchase or refinance loan. Renovations must be completed within 15 months of closing, though.
- HFA Preferred: A conventional loan for low- to moderate-income buyers that allows for down payments as low as 3%. Local housing finance agencies (HFAs) can use these loans to serve borrowers through their lending partners.
If you can refinance your home at a lower interest rate, you may see a decrease in your monthly bill and pay less over the lifetime of your loan.
Fannie Mae has created RefiNow to benefit low-income homeowners who wish to take advantage of lower interest rates. Here’s what you need to qualify:
- A Fannie Mae-owned mortgage on your principal residence: To find out if Fannie Mae owns your loan, use the Loan Lookup tool on its website.
- Low income: You must have a current income at or below your area’s median income level.
- Good payment history: You cannot have missed a payment on your current home loan in the past six months, and you can’t have more than one missed payment in the past 12 months.
- Qualifying loan and debt ratios: Your current loan-to-value ratio must be 97% or less, and the debt-to-income ratio on your new loan must be 65% or less.
If you choose a lender that uses one of Fannie Mae’s mortgage products, your loan approval will depend on your creditworthiness and how much home you can afford. Lenders do not want to take on a risky loan, which is why they thoroughly check borrowers’ credit histories, employment histories and bank statements before lending.
National mortgage requirements by type
|Min. credit score||Min. down payment||Compare with other lenders|
|Conventional||Typically 620||Typically 3%||Mortgage lenders|
|FHA||500||3.5% with 580 credit score||FHA lenders|
|VA||Set by lender (often 580)||0%||VA lenders|
|USDA||Set by lender (often 640)||0%||USDA lenders|
Costs and fees
Many new homebuyers are shocked by how much extra they have to pay when they purchase a new home. Your down payment is not the only upfront cost you will have. Closing costs can include:
- Appraisal fees
- Inspection fees
- Lender fees
- Title fees
- Insurance and taxes
Fees vary from lender to lender, which is why it’s important to know your closing costs before settling on a lender.
How does Fannie Mae work?
Since Fannie Mae is not a direct mortgage lender or broker, you will not be able to work with it to secure a new home loan. Instead, many lenders sell loans to Fannie Mae, which borrowers have little control over.
Is Fannie Mae legit?
Fannie Mae is a legitimate business created by Congress. It has been around a long time and introduced the fixed, 30-year mortgage to the U.S. market. Fannie Mae buys mortgages directly from banks and lenders, which frees up their capital to offer new loans.
Where is Fannie Mae available?
You can contact Fannie Mae by email or over the phone.
Fannie Mae Reviews
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I have a credit score over 800 and applied for a Fannie Mae card. I was told I needed to upload a form of identification and proof of address. I uploaded my driver's license and a pdf copy of a multiple page checking account statement as part of the initial application process. The company then sent seven automated emails stating they needed documents to be uploaded but give no specific reason why the previously uploaded documents were incorrect.
Calling their 1-800 number gets you no help as the person online has no access to the documents you uploaded. Discover Bank calls their checking account "Cashback Debit" which according to Fannie Mae is not a debit card account and not a checking account. The last time I checked most checking accounts come with a debit card. Documents were uploaded 4 times after which time I told them to cancel the application as I don't want to be associated with such a dysfunctional company. Your loss, not mine!
These people will transfer your loan over to any old service provider they want, no matter how sketchy they appear. I have been doing business with American Pacific Mortgage, and have refinanced with them, over several years now only to find out that my service provider had been transferred to a company called "Mr Cooper" whose mailings look very much like spam that we homeowners receive constantly. Come to find out what I thought was spam was my new service provider, all the while I'm making payments to my old one. After some calling around I find out Fannie Mae can snap their fingers and transfer your loan (and therefore livelihood) to anyone they want, but when asked to transfer back? Can't do it! Not without you having to go through another round of refinancing your loan.
So thank you Fannie Mae! I'm now stuck with a service provider I don't know, want, or trust with my livelihood, aka HOME! It's things like this that really get people upset. We're human beings, not just numbers on a spread sheet for you slosh around because you have to make up for whatever investment failures you incur. If I could give you ZERO stars I would.
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I went to Fannie Mae from a good resource. But only to find out that within a few weeks my mortgage was sold to prime lending then 1 year later sold to Nationstar. Within a year I had 3 different mortgage Co. They stop letting these mortgage Co buy them out so many times. Do not recommend this company.
Fannie Mae can be a cumbersome loan process, but they do provide quality service upon completion. They are very tedious about the documentation needed, as most are, but they're overall service-related resources are unmatched.
As a Housing Counselor, I am aware of the Home Ready and Home Possible loans offered by Fannie Mae and Freddie Mac which require a 3% down payment that can be funded fully through gifts. The FHA loan requires a 3.5% down payment (10% for lower credit scores) that has limitations on using gifted money. The Home Ready and Home Possible loans also allow for alternate credit reporting, while the FHA does not.
I refinanced with Fannie Mae through my credit union but so had many other people. It took over 90 days but in the end it saved me almost $200. Easy to sign all the final papers. Very happy with the end result.
We bought a house through foreclosure, we are a first time home buyer and knew we would have made mistakes but this wasn’t what we expected. After we got in the deal we realized they had remodeled the house but it was cheaply done so we had planned one project a year. First off, the floor was hollow as they didn’t put the liner below, two months later we were sleeping only to hear a loud crash. This was the entire kitchen cupboard. Fell to pieces on the floor. I was so scared cause I have a 9 year old who could have been in the kitchen that morning, thank God she wasn’t. The bathroom is horrible, everything was cheaply and poorly done. PLEASE STAY AWAY from FANNIE MAE properties.
My husband and I had a closing date, contract, and paid an appraisal fee for a Fannie Mae Homepath house. They went and sold the house for cash to someone else. We are contacting an attorney to fight it. Terrible business!!
I was buying a foreclosed from Wells Fargo through Bbt. The home was originally financed through Fannie Mae. While during the closing process and 2 weeks away somehow Wells Fargo proceeded with foreclosure of the home and auctioned it off to Fannie mae with no warning of auction nor any posting of auction date. After I got the home inspected and got a pest inspection and treatment for $700 they sold it to Fannie mae.
Now that wells fargo and Fannie mae knows what happened they still find no wrong and Fannie mae is now putting work into the home so they can up the price of the sale of the home. Fannie mae still wont just let me buy the home as I was continuing to do even though it is ready to close ad has been since Jan 10th, Wells fargo went ahead with the sale of the home to fannie mae with no competition on Dec 11. I alerted Wells fargo throughout the closing process and they still went forward with the sale. No auction date was put on the home and wells Fargo keep saying there is no redemption laws in Virginia which is their reason for continuing the sale without guilt.
Put in a bid over list price on HomePath property. Fannie Mae put property into multiple bid. I placed much higher bid 1 hour from deadline. FM accepted bid that was $350 higher as "highest and best". That bid was entered after mine, and placed by another agent in the listing agent's real estate office. Fannie Mae refused to release details on the bids or timing. Claim that they "investigated" and found no evidence of wrongdoing in the process. Fannie Mae property sales process is tainted. They should be made to adhere to the Freedom of Information Act, as was attempted in House Bill HR 1694 2017, which was not taken up by the US Senate.
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page. Specific sources for this article include:
- Federal Housing Finance Agency, “FANNIE MAE AND FREDDIE MAC.” Accessed November 17, 2022.
Fannie Mae Company Information
- Company Name:
- Fannie Mae
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