Which government-sponsored enterprise deals with purchasing both conforming mortgage loans and those insured by the FHA?

Which government-sponsored enterprise deals with purchasing both conforming mortgage loans and those insured by the FHA?

• A. Federal Trade Commission
• B. Federal National Mortgage Association
• C. Federal Home Loan Mortgage Corporation
• D. Department of Housing and Urban Development

Answer: (B)

The Federal National Mortgage Association, commonly known as Fannie Mae, is the government-sponsored enterprise responsible for purchasing both conforming mortgage loans and those insured by the Federal Housing Administration (FHA). Fannie Mae plays a crucial role in the secondary mortgage market, where it buys loans from lenders, thus providing them with additional funds to offer more loans to borrowers. By purchasing FHA-insured loans, Fannie Mae helps facilitate access to affordable housing for a broader range of consumers, especially those who may have limited financial resources or lower credit scores. This activity not only supports the availability of mortgage credit but also helps stabilize the housing market by ensuring liquidity. This makes it easier for lenders to provide loans and for borrowers to qualify, thereby enhancing homeownership opportunities in the United States.

The Federal National Mortgage Association, commonly known as Fannie Mae, is the government-sponsored enterprise responsible for purchasing both conforming mortgage loans and those insured by the Federal Housing Administration (FHA). Fannie Mae plays a crucial role in the secondary mortgage market, where it buys loans from lenders, thus providing them with additional funds to offer more loans to borrowers. By purchasing FHA-insured loans, Fannie Mae helps facilitate access to affordable housing for a broader range of consumers, especially those who may have limited financial resources or lower credit scores.

This activity not only supports the availability of mortgage credit but also helps stabilize the housing market by ensuring liquidity. This makes it easier for lenders to provide loans and for borrowers to qualify, thereby enhancing homeownership opportunities in the United States.