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The new Jumbo-Conforming program was adopted by Fannie Mae and Freddie Mac effective from April 1, 2008 until December 31, 2010. [6] The bill was signed into law by President Bush on February 13, 2008, [ 7 ] but the new rates were not being honored by any lenders (as of March 30, 2015).
Fannie Mae's guidelines are outlined in their Selling Guide, while Freddie Mac's requirements are detailed in their Servicer Guide. Both agencies aim to ensure borrowers have a reliable and sufficient income to support mortgage payments, thereby minimizing risk for lenders and investors. Most mortgages are preceded by both written and verbal VOEs.
November: Fannie Mae announced that the Department of Housing and Urban Development (“HUD”) would soon require it to dedicate 50% of its business to low- and moderate-income families" and its goal was to finance over $500 billion in Community Investment Act-related business by 2010. [34]
An FNMA loan, aka a conforming loan or Fannie Mae-backed mortgage, is a loan or mortgage that has been sold to the Federal National Mortgage Association (FNMA, or Fannie Mae) — or one that meets ...
"Over the past decade Fannie Mae and Freddie Mac have reduced required down payments on loans that they purchase in the secondary market. Those requirements have declined from 10% to 5% to 3% and in the past few months Fannie Mae announced that it would follow Freddie Mac's recent move into the 0% down payment mortgage market." [153]
Fannie Mae and Freddie Mac only buy loans that conform to the FHFA’s standards. That means they must be under a certain loan limit and borrowers must meet specific financial requirements.
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Low-doc loans carry a higher interest rate and were theoretically available only to borrowers with excellent credit and additional income that may be hard to document (e.g. self-employment income). As of July 2010, no-doc loans were reportedly still being offered, but more selectively and with high down payment requirements (e.g., 40%).