What is the difference between FHA and Fannie Mae? Other loan types?

[Account Closed]

I am intrested in knowing more about the differences, pros and cons, etc about FHA and Fannie Mae.

I am also wondering if there any other loans, pardon me if I am calling it by the wrong name, that are similar but different.

I know there is a lot of different loan types for mortgages, but I do not know what they are

any info helps, thanks!

[Nick Williamson]

Ok, here it goes...

Both Fannie Mae (FNMA) and Freddie Mac (FHLMC) are similar in their mission-- to provide liquidity, stability, and affordability to the mortgage market.?

They do this by purchasing residential mortgages that conform to certain standards from lenders, and then either hold these mortgages or use them to issue MBSs to be traded in the capital markets. This allows them to provide access to funds (on reasonable terms) to banks, savings & loans, and mortgage companies so these lenders can continue lending money for mortgage loans w/out using their depositors funds.

Fannie & Freddie do not insure mortgage loans; they purchase them.

The Federal Housing Administration (FHA) insures mortgage loans made by FHA-approved lenders. The FHA insures lenders against default by charging monthly mortgage insurance to the mortgagor, which in turn, allows lending guidelines to be more relaxed.

VA loans are only for veterans (or surviving spouses) and are fully guaranteed by the Dept of Veteran Affairs. The VA insures loans at no cost to a veteran buyer (other than the VA funding fee), whereas FHA insures loans by charging the mortgage insurance to the mortgagor.