Fannie Mae and Freddie Mac are Government Sponsored Enterprises (“GSEs”). Their role is to securitize mortgages or to help bundle them up to sell on the secondary market. This role effectively keeps interest rates lower.
“Conforming” or “Conventional” loans up to $625,500 are underwritten to Fannie’s and Freddie’s guidelines. Fannie Mae and Freddie Mac offer almost the same interest rates.
Many people think that Fannie and Freddie are the same thing, but they are not. They are very similar, but Freddie definitely has more flexibility with respect to certain loan programs.
Freddie allows for non-occupant co-borrowers, for example, and Freddie will lend up to 75% LTV for investment properties with loans over $417,000. Fannie offers neither of these programs.
Many lenders do not have access to all of Freddie’s products, and this greatly limits the options for borrowers at such lenders. JVM, of course, has 100% access to all of Freddie’s products.
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