What is the difference between fannie mae and hud

We often get questions from clients asking us to clarify the difference between Fannie Mae, Freddie Mac and Ginnie Mae. We also get asked about Conforming vs. FHA loans. Today, they are for the most part owned and operated by the Federal Government.

Without Fannie and Freddie, rates would be much higher. This is because there is not enough private sector demand for mortgages to keep rates as low as they are. Fannie Mae was first chartered by the U. Today it is a shareholder-owned company that operates under a congressional charter. Freddie Mac was chartered by Congress in as a private company to likewise help ensure a reliable and affordable supply of mortgage funds throughout the country.

It looks like your browser does not have JavaScript enabled. Please turn on JavaScript and try again. Fannie Mae Web Site Fannie Mae Charter Act Freddie Mac was chartered by Congress in as a private company to likewise help ensure a reliable and affordable supply of mortgage funds throughout the country.

Qualification requirements are much more flexible than traditional loans. Limitations include that fewer lenders offer Section loans and the loans are only offered in eligible areas, which are determined by participating tribes. Also, borrowers are required to pay mortgage insurance, which adds to the cost of the loan.

If you have below-average credit and are short on funds for a down payment, an FHA-insured loan can help you become a homeowner.

FHA loans can also potentially be an option for manufactured homes. Another advantage of FHA loans is that they can be assumable, meaning that whoever buys your property can take it over from you, while conventional mortgages generally are not.

Once approved, they assume all of the obligations of the mortgage upon the sale of the property, relieving the seller of all liability. While getting approved is easier than it is for a standard loan, MIPs add to the overall cost of the loan.

Mortgage lending discrimination is illegal. Other government-sponsored mortgage loan options may also be available. There are two other types of government agency-insured loan programs—U.

When analyzing any type of home loan, every borrower should consider all of the costs involved. A mortgage will come with interest to be repaid over time, but that is not the only cost. Also, keep in mind that mortgage payments and mortgage insurance from any type of loan may offer some tax breaks, but most involve an itemized tax deduction.

A Section loan can be used to buy or build a home. It can also be used to rehabilitate a home or refinance a home that you already own. Department of Housing and Urban Development. Accessed Nov. Federal Deposit Insurance Corp. House of Representatives. The New York Times. Real Estate Investing. Your Privacy Rights. Fannie Mae was formed and created under the watch of Franklin D. Roosevelt back in The purpose was to insure that mortgage funding was sufficient and available at all times.

Especially during periods of depression and tougher economic times. Fannie Mae became a public enterprise back in and was publicly traded. Freddie Mac was formed back in The reason Freddie Mac was created was to create competition with Fannie Mae. The purpose was so that Fannie Mae would not have a monopoly on mortgage loans.