Fannie Mae stands for the Federal National Mortgage Association. The acronym is FNMA which may be pronounced Fannie Mae.

It was established in 1938 to increase the amount of money available to borrowers to spur the growth of the country. The original intent was to make the cost of owning a home more affordable to low to moderate income families. They did not intend to compete with everyday lenders but purchased loans from other lenders effectively replenishing the available supply of money available for new loans.

Fannie Mae gets its cash back by selling to investors after they have securitized them by packaging a number of them together. These security instruments are sold to large institutional investors who earn a predetermined rate of return. These assets are are also called mortgage-backed securities. The risk is spread over the large pool of loans making them more attractive. If one or two loans go bad the overall impact is less severe and ,of course, they are guaranteed by Fannie Mae.

They split their principal lines of business onto three parts.

1. Single family homes- They buy single family loans from all types of lenders freeing up money for additional loans.

2. Multifamily housing- Fannie Mae provides funds for financing options for rental units with five or more units through approved lenders

3. Housing and Community Development- They have a 10 year plan involving $2 trillion dollars for community development and expanding home ownership.

They must sell their foreclosures too offset their losses. They offer single family homes, duplexes, townhouses and condominiums. You can guess that they have many foreclosures available due to the current economic situation in this country.

The age and condition vary as you might expect. Normally Fannie Mae does NOT repair or fix up houses preferring to sell them as is. Have any property you are interested examined by a licensed Home Inspector.

How do I find these gems?

Fannie Mae sells them through licensed real estate agents throughout the country. They are listed in the (MLS) Multiple Listing Service so most agents can locate them for you.

It might save time if you get pre-approved prior to searching for a property. The agent must be able to prove he is working with a buyer who is capable of paying for the house. They won't go any further without this knowledge.

Once the offer is made, Fannie Mae will do one of three things. They will accept the offer as is, counter the offer, or reject the offer. It is not unusual for them to be considering many offers for the same property so keep this mind when determining your offer.

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