What You Need To Know About Fannie Mae
Fannie Mae is also referred to as Federal National Mortgage Association. It is a government approved group that provides mortgage to families looking to buy own homes. The association was established in 1938 by the US government in order to promote home ownership by providing an alternative mortgage market.
Initially, Fannie Mae was owned by the government, but it has now been transformed into a private entity, thus making it possible for low and middle income households to buy their own homes.
Fannie Mae works by making it easy for households to buy foreclosed homes at very affordable prices. However, the entity does not provide loans directly to consumers. On the contrary, it works with mortgage and financial institutions to help households qualify for loans. If you are looking to own a home, then this is the perfect time for you. The current state of the economy has led to a decline in the price of home’s and as a result, the number of foreclosed homes has gone up. With Fannie Mae, you no longer have to wait to have the right amount of money to get your own home.
Fannie Mae is for Secondary Market Only
One thing you need to know before making an application for a Fannie Mae loan is that the program only works on the secondary market. What this means is that you can only get a home loan for properties that are foreclosed and are reselling and not those that are new. For you to qualify for the Fannie Mae mortgage or loan, you have to show proof of your employment. The program requires that all applicants must have been in employment for a period of not less than 2 years. Applicants who are in self-employment must show proof that they own at least 25 percent of the business.
In addition to meeting the above requirement, you need to approach a lender approved by Fannie Mae. Be careful when selecting a lender since not all of them are approved to provide Fannie Mae mortgage. You also must ensure that your debt to income ratio is not more than 28%. This means that your monthly instalments should not be more than 28% of your income every month.
Fannie Mae mortgage covers a wide range of properties such as town houses, condos and detached homes. It also includes homes that are found in both modest and expensive neighbourhoods. Keep in mind that Fannie Mae homes are offered for sale as-is condition. The condition varies from good, average to poor. At times, the homes are repaired so that they can be sold at relatively high prices while at other times they are left in their original condition.
To apply for these properties, Fannie Mae recommends that you do so through a local real estate agency. These agents make a list of such properties and can advise you on which properties best suit your needs. Thanks to the expanding housing market and Fannie Mae mortgage program, a large percentage of Americans are now able to afford their own homes.