Fannnie Mae is short for the Federal Mortgage Association a government-backed corporation
created by Congress in the 1930s to support the housing market by providing funding to financial institutions for the specifically for granting housing loans, also called Fannie Mae foreclosures.
The goal is to help middle- to low-income families own foreclosed properties. Fannie Mae foreclosures also aim to put an end to the predatory lending practices of some financial institutions, particularly mortgage fraud. Predatory lending covers everything legal that a lender offers a borrower, which may not be in the best interest of said borrower or which they may not really need. Mortgage fraud takes place whenever there are unfair appraisals and the falsification of documents to qualify for a mortgage.
Benefiting from Fannie Mae Foreclosures
Before you can be eligible for Fannie Mae foreclosures you need to remember that Fannie Mae supports the secondary housing market only meaning the homes are for reselling and not brand new.
To qualify for a loan to own Fannie Mae foreclosures the borrower should be able to show proof that they have been gainfully employed in the last two years. If you are self-employed you need to at least more than 25 percent invested in your company. The loans that you apply for should meet the limits set by the company annually.
The lender that you approach must be approved to provide loans for Fannie Mae foreclosures and your debt-to-income ratio should not exceed 28 percent, which means that your amortization must not go beyond 28 percent of your monthly income.
Fannie Mae foreclosures are only offered to individuals who will acquire the property for the reason of making it their primary residence. So it is really not for property investors or real estate companies. This is the best way to own property at very low interest rates through easy terms that is why many home owners have acquired their homes in this manner.