Austin Real Estate Blog

There are so many options with regard to mortgage loans, that the opportunity to review some basic terms is the best approach before obtaining a loan. Often heard during the mortgage and home buyer experience are several references to federal mortgage corporations. Rarely are they explained in a simple clear manner. We will begin by explaining what Fannie Mae, Freddie Mac and Ginnie Mae actually are and how they apply in the industry.

Fannie Mae is Federal National Mortgage Association or FNMA - The Company was chartered by the congress, however it is share-holder owned. Currently they are the principal supplier of residential mortgage funds.

Ginnie Mae or the Government National Mortgage Association or GNMA - The Company is a part of the United States Department of Housing and Urban Development (HUD). This Government agency was created by Congress to provide mortgage funding for lenders who are purchasing with a VA or other Government owned / backed Loans.

Freddie Mac is the Federal Home Loan Mortgage Corporation or FHLMC - This Company is a shareholder run company who creates a secondary mortgage market by purchasing all forms of loans from the primary market for mortgage lenders.

Generally speaking the two share holder based companies do not have much if any federal involvement. Recently due to the Real Estate Mortgage Crisis, and the subsequent repercussions, the federal government has altered their position. They now hold influential positions with in both companies to attempt to circumvent further problems. Time will tell if this was the correct choice for the country and the real estate market place.