What You Need to Know about Fannie Mae Loans

Fannie Mae Loans and Property Types

Fannie Mae is one of the most important parts of the American real estate market.  It is a Government-Sponsored Enterprise (GCS) which purchases mortgage loans from lenders including banks, credit unions, and mortgage companies.  It holds them as an investment and cycles back available capital back into the real estate market. Let us get to know more about Fannie Mae loans.

To date, Fannie Mae is the leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets at all times.  Also, they help make possible the popular 30-year, fixed-rate mortgage, which provides homeowners with stable, predictable mortgage payments over the life of the loan.

Sounds easy right but in order for mortgages to be eligible for a Fannie Mae purchase, there are certain conditions.  Criteria for each type of property is not always the same.  Let this article help you in learning more about these specific property types.

Principal Residence Property Type of Fannie Mae Loans

As defined generally, a principal residence is a primary location that a person inhabits. It does not matter whether it is a house, apartment, trailer or boat, as long as it is where an individual, couple, or family household lives most of the time.

However, for Fannie Mae purposes,   is the home you live in, and does not include apartment, trailer or boat.  If you are a homeowner, lives in a house either alone or with your family, and you do not have any other place of residence then that saves you a lot of time. As Fannie Mae says, this is the “property that the borrower occupies as his or her primary residence.”   It might sound vague but one thing we see it is if this is the property you commonly put in your information as your permanent address, residential address or place of residence.

Here are some other complexities which you might need to look for:

  • Multiple owners of the home.  For multiple owners, only one borrower needs to occupy and take the title of the property for it to be a “primary residence,” unless there are other requirements for mortgages that have guarantors of co-signers. If that is the case, you will need to consult Fannie Mae’s guidelines to sort out the complexities.
  • The parent or legal guardian to provide for a disabled or handicapped child.  In this case, you will need to check the specific requirements for this loan.  Also, the child must be unable to work and not have sufficient income to qualify for a loan on their own. In this case, the parent or guardian is considered the owner/occupant.
  • Children want to provide housing for parents.  Fannie Mae also supports this type of home loan.  In this case, the parent must be unable to work and unable to support a loan with their current income. If this requirement is met, the child is considered the owner/occupant.

Second Home Property Type of Fannie Mae Loans

As defined by Fannie Mae, a “Second Home,” property must be a one-unit dwelling.  Second Homes does not include multi unit properties and duplexes, even though Fannie Mae provides support for them.  Aside from that, it must not be a rental property of any type, even if it is a single-unit residence, and it can’t be a timeshare agreement.

  • Here are additional specifics for Fannie Mae’s Second Home property requirements:
  • You must live in the property for “some portion of the year.”
  • The home must also be suitable for year-round occupancy
  • You must have exclusive control of the property.
  • The is no legal agreements that give control of occupancy to a management firm.

Investment Property of Fannie Mae Loans

If you have a property that is owned by you but you do not occupy it then it can be an Investment Properly.  A Loan-Level Price Adjustment (LLPA), which adjusts the mortgage cost, will be applied to any loan on an investment property. This will come in addition to any adjustments that are applicable for any other reason.

Fannie Mae has basically the same standards set for Investment Property like that for eligibility and pricing for second home and owner-occupied properties.

Please see the Fannie Mae matrix below for more details.

Fannie Mae Loans Eligibility Matrix

Need Assistance with Your Fannie Mae Application?

Home Mortgage Alliance Corporation (HMAC), NMLS #1165808 is now Fannie Mae compliant.  We can assist you with your mortgage loan from Fannie Mae, guide you in meeting their specific criteria and also assist you in documentary requirements among others.

If you want more information on your loan options, contact us today. We’ll show you the details of Fannie Mae property qualifications so you can find the right loan for your primary residence, second home, or investment property.

  • Phone Number: 800-900-7040
  • E-mail: info@homemac.com
  • Website:  https://homemac.com

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