Everyone is familiar with the names of Fannie Mae and Freddie Mac but there is often confusion about who they are and what they do.
Who Are Fannie and Freddie?
Fannie Mae and Freddie Mac are both publicly owned shareholder companies with government charters. Their purpose is to ensure that mortgage lenders have enough funds to lend to home buyers and to provide liquidity, stability and affordability to the mortgage market. They do this by purchasing mortgages from lenders and either keeping them in their portfolios or packaging the loans to be sold on the secondary market as “Mortgage-Backed Securities”. The lender loans money to the home buyer and then sells the loans to either Freddie or Fannie. These loans are called conforming loans because the loan must conform to strict guidelines and loan limits.
What is the Difference Between Fannie Mae and Freddie Mac?
I can’t really say it better than Freddie Mac’s website:
Freddie Mac and Fannie Mae have the same charters, Congressional mandates and regulatory structure. The two companies, however, have different business strategies. Competition between Freddie Mac and Fannie Mae ensures that the benefits of the secondary market are passed on to homebuyers and renters in the form of lower housing costs. Both Freddie Mac and Fannie Mae operate as publicly traded corporations.
What is the 2015 Conforming Loan Limit for Scottsdale Arizona?
The annual conforming loan limit for conventional mortgages delivered to Fannie Mae or Freddie Mac for 2015 remains at $417,000.
Fortunately there are many options for non-conforming loans with great interest rates. With the median annual sales price for Scottsdale at $475,000 (Cromford Report), there are many home buyers who will not qualify for a conforming loan. Fill out the form below if you need a good lender for conforming or non-conforming loans.