Well over 90% of all mortgage financing involves Fannie, Freddie and HUD (FHA); meaning that over 90% of mortgages are effectively “government backed”.
All of these mortgages must be under-written via guidelines established by those agencies, and many of those guidelines are not always rational. Examples include “explaining” a $1,200 deposit from 3 months ago, or providing ALL pages of a retirement account statement when pages 7 through 15 are just boilerplate or blank.
All of these mortgages are purchased by Fannie, Freddie or large banks (like Wells Fargo or B of A). HUD does NOT buy mortgages; they only INSURE FHA mortgages.
Most people know the difference between HUD (FHA) and Fannie/Freddie (Conventional Loans). But most people do not know the difference between Fannie and Freddie because there is very little.
Freddie and Fannie offer the same rates, but Freddie is slightly more flexible with a few programs, such as “cash-out” limits (Freddie goes to a higher LTV for High Balance Loans), and “co-signers” or “non-occupant co-borrowers” (Fannie does not allow “co-signing”, but Freddie does).
Only some lenders offer Freddie Products, and all lenders have different “overlays” or guidelines over and above the Fannie/Freddie/HUD guidelines. The key is having access to several different lenders and knowing which lenders do what.
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