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While we are not affiliated with the government in any way, our private company engaged writers to research the LIHEAP program and compiled a guide and the following answers to frequently asked questions. Our goal is to help you get the benefits that you need by providing useful information on the process.

Fannie Mae Mortgage Loans

Table of Contents

About Us

We are not affiliated with the government in any way. We are a private company that engaged writers to research the Fannie Mae loans and compiled a guide and the following answers to frequently asked questions. Our goal is to help you get the benefits that you need by providing useful information on the process. We are not providing legal or financial advice. If you need such advice please contact an attorney or a financial advisor.

What is Fannie Mae?

The Federal National Mortgage Association (FNMA), more commonly known as Fannie Mae, is one of the two largest secondary market mortgage purchasers. Fannie Mae is not a federal agency.

Initially founded by congress in 1938, this government-sponsored enterprise was created to help make housing more affordable and make it easier for borrowers to qualify for and maintain their mortgage. After the housing crisis in 2008, Fannie Mae has been under the government conservatorship of the Federal Housing Finance Agency (FHFA).

Learn more about Fannie Mae loans on their website here.

How Does Fannie Mae Work?

Fannie Mae does not provide mortgages to prospective homebuyers. Instead, the corporation guarantees or purchases mortgages to help private lenders offer more mortgages and provide competitive loan rates and terms. Lenders that want to work with Fannie Mae must meet guidelines issued by the federal government that prevent predatory lending tactics, such as:

  • Low introductory rates that are followed up by high variable rates
  • High-interest rates or rates that increase overtime sharply
  • Features that make refinancing a loan more likely

Fannie Mae loans also include purchase restrictions. For example, for 2023, conventional loans on single-family homes have loan limits of $726,200 for most areas. These limits are set by the Federal Housing Finance Agency and can change annually.

How Can Fannie Mae Impact Your Ability to Get a Loan?

Since Fannie Mae guarantees the mortgages that approved lenders provide, these lenders can require less from borrowers to approve them for a loan. Before congress founded Fannie Mae, lenders commonly required borrowers to provide down payments as high as 50 percent or more and issued strict loan terms that made it far easier for homeowners to foreclose on their homes.

To obtain a loan backed by Fannie Mae, you'll have to go through a lender approved to work with the corporation. Doing so can help you receive a loan that avoids predatory tactics and may have lower interest rates because the lender must meet Fannie Mae guidelines. These guidelines also impact the eligibility requirements that a borrower must meet to qualify for a loan, including credit score, down payment, and debt-to-income ratio requirements.

What Types of Loans Does Fannie Mae Provide?

Fannie Mae provides several types of loans, including:

  • HomeReady Mortgage
  • 97% LTV Options
  • HFA Preferred
  • HomeStyle Energy
  • HomeStyle Renovation
  • MH Advantage for Manufactured Housing
  • The Fannie Mae Former Owner Rental Program

A HomeReady Mortgage is designed to serve low-income borrowers who meet eligibility requirements. HomeReady Mortgage is available to both first-time and repeat homebuyers and includes lower down payment requirements than the average loan.

Learn more about HomeReady Mortgages here.

97% LTV Options provides first-time borrowers with low down payment options as low as three percent. Unlike HomeReady Mortgages, borrowers do not need to have limited income to qualify.

Learn more about 97% LTV Options here.

HFA Preferred mortgages are available through approved Housing Finance Agencies to help low-to-moderate income borrowers qualify for a mortgage. The Housing Finance Agencies set income limits, and many of those agencies provide down payment assistance.

Learn more about HFA Preferred mortgages here.

HomeStyle Energy is available for borrowers purchasing or refinancing a home that also needs to make renovations on the home. These renovations can improve the safety or comfort of the home, reduce utility costs, and more. This type of loan is meant to be combined with another mortgage program covering the home's primary mortgage.

Learn more about HomeStyle Energy loans here.

HomeStyle Renovation is another type of loan that offers borrowers a way to finance home repairs and improvements when purchasing or refinancing a home. This loan can be combined with other Fannie Mae loans, such as HomeStyle Energy or HomeReady.

Learn more about HomeStyle Renovation loans here.

MH Advantage helps borrowers purchase a manufactured home. MH Advantage includes down payments as low as 3 percent, simple appraisal processes, and waived 0.50 percent LLPAs.

Learn more about MH Advantage here.

The Fannie Mae Former Owner Rental Program offers month-to-month rental options for homeowners that are living on their property after it was foreclosed on. This program allows former owners to rent the property while it is being marketed for sale to a new owner.

Learn more about the Fannie Mae Former Owner Rental Program here.

Learn more about the types of loans that Fannie Mae provides here.

Who Can Qualify for a Fannie Mae-Backed Loan?

To get a Fannie Mae-backed loan, you must meet certain qualifications:

  • Credit Score: You must have a median FICO score of at least 620 to qualify.
  • Debt-to-Income Ratio: In most cases, your debt-to-income ratio cannot be higher than 50 percent to qualify. Your debt-to-income ratio is your monthly debt payments compared to your gross monthly income.
  • Down Payment: Down payment requirements are generally between three and five percent, depending on the type of loan you choose. However, loans towards investment properties or second homes may require a larger down payment amount.
  • Homeownership Education: Most first-time homebuyers will be required to take a homeownership education course.
  • Loan Type Specific Requirements: Some types of loans will include additional eligibility requirements. For example, HomeReady Mortgages require borrowers to meet income limits.

Learn more about Fannie Mae loan eligibility requirements here.

How to Apply for a Fannie Mae-Backed Loan

Fannie Mae does not provide financing directly to borrowers. Instead, borrowers who wish to apply for a Fannie-Mae backed loan must work with a bank or non-bank lender approved by Fannie Mae. Therefore, you must check with your local lenders and ask about Fannie Mae loans.

After selecting a lender that you wish to apply for a Fannie-Mae backed loan through, you may need to provide documents to support your application. Those documents may include:

  • Record of employment
  • Proof of income, such as pay stubs or tax returns
  • Proof of monthly debt obligations, including car loans, alimony, credit card payments, and student debt

After a lender approves you, your maximum mortgage amount is determined by factors such as your loan type, credit score, debt to income ratio, and income. After you are pre-approved for a mortgage, you can search for a home within your price range, make an offer, and negotiate with the seller. Your lender will likely require a home inspection and appraisal to be performed before you can secure your mortgage and finalize the sale of your new home.

How Can You Know If Your Loan Is Owned by Fannie Mae?

You can find out if your loan is owned by Fannie Mae online or by phone.

To check if your loan is owned by Fannie Mae online, use the online Fannie Mae Mortgage Loan Lookup tool here.

To check if Fannie Mae owns your loan by phone, contact Fannie Mae at 1 (800) 232-6643.

How to Refinance a Fannie Mae-Backed Loan

If you are struggling to make your mortgage payments, you have high-interest rates or wish to change your loan terms; refinancing may be the best option for you. Refinancing a mortgage can benefit borrowers with potential:

  • Lower monthly payments
  • Altered loan length
  • Lowered interest rates
  • More convenient payment methods
  • Extra funds for renovations, repairs, and upgrades

There are several types of Fannie Mae loans that are available for borrowers wishing to refinance their homes. In most cases, your loan must be owned by Fannie Mae to qualify for refinancing.

You can learn more about refinancing opportunities with Fannie Mae here.

Need More Help

If you have any questions about Fannie Mae loans or if you currently have a Fannie Mae loan and need assistance, contact Fannie Mae at 1 (800) 232-6643. Alternatively, you can email the Fannie Mae Resource Center by completing the general online form here.

View or Download Our Free Guide

While we are not affiliated with the government in any way, our private company engaged writers to research the Fannie Mae loans and compiled a guide and these answers to frequently asked questions. Our goal is to help you get the benefits that you need by providing useful information on the process.

Our free Fannie Mae Guide is filled with helpful information about how to apply, program eligibility requirements, and how to get in touch with local offices. You can view or download our free guide here.