What are the Fannie Mae guidelines?
Fannie Mae guidelines for conventional mortgages
Fannie Mae guideline type | Minimum requirement |
---|---|
Credit score | 620 |
Total debt-to-income ratio | Cannot exceed 45%, with some exceptions up to 50% |
Cash reserves | Up to six months, depending on credit score, down payment amount, DTI ratio, occupancy type and property type |
What is the role of Fannie and Freddie?
Fannie Mae and Freddie Mac were created by Congress. They perform an important role in the nation’s housing finance system – to provide liquidity, stability and affordability to the mortgage market.
What is the purpose of Fannie Mae?
At Fannie Mae, we provide liquidity to the single-family market by purchasing and guaranteeing mortgage loans made by lenders and issuing debt securities and mortgage-backed securities that attract global investors to finance U.S. housing.
How long is a Recert of value good for Fannie Mae?
12 months
Fannie Mae appraisals are usually valid for 12 months, but they also require an appraisal update after the first 120 days.
Is Fannie Mae still in conservatorship?
No permanent FHFA director has been chosen by the Biden administration. Fannie and Freddie continue to retain earnings on their path to exit conservatorship.
What’s the difference between Fannie and Freddie?
The primary difference between Freddie Mac and Fannie Mae is where they source their mortgages from. Fannie Mae buys mortgages from larger, commercial banks, while Freddie Mac buys them from much smaller banks.
What are the benefits of a Fannie Mae loan?
Fannie and Freddie loans have competitive interest rates and low down payment options. But the biggest benefit of Fannie and Freddie loans: They are the mortgages most lenders prefer to make. There is a ready market where lenders can sell the loans, earn a profit and gain more capital to make additional loans.
What are the pros and cons of Fannie Mae loans?
Pros and cons of the Fannie Mae HomeStyle loan
- The renovation costs get bundled into your mortgage so you only have one monthly payment.
- Cancelable mortgage insurance once you have more than 20% equity in the property.
- You can use it on any type of property, including vacation homes and investment properties.