| "Fannie Mae" is the nickname for the Federal National | | | | These include all forms of single-family homes such as |
| Mortgage Association. | | | | detached homes, condos, and town houses. The |
| Although it has the "Federal" name in its title, it's | | | | inventory often includes homes in modest to more |
| actually a separate, chartered corporation that | | | | expensive neighborhoods. |
| operates in the secondary mortgage market. | | | | All Fannie Mae homes are sold in an "as-is" condition. |
| In this article, I'll give you the background and history | | | | These conditions range from good to poor and |
| of Fannie Mae, describe typical properties, and show | | | | include "repo's" which may or may not be in poor |
| you how to buy those properties for investment | | | | condition. Note that Fannie Mae sometimes fixes |
| purposes. | | | | these properties up in order to get a higher price; at |
| Fannie Mae's Background | | | | other times, it simply leaves them in the same |
| Fannie Mae is a federally chartered organization. Its | | | | condition. |
| purpose to expand affordable housing and bring global | | | | In order to obtain one of these properties, Fannie |
| capital to local communities in order to serve the U.S. | | | | Mae secifies that you go through a local realtor. |
| housing market. | | | | Real Estate Agents are required to list these |
| Essentially, Fannie Mae operates in America's | | | | properties on the local Multiple Listing Service. Any |
| secondary mortgage market to ensure that | | | | local agent can show you a property and make the |
| mortgage bankers and other lenders have sufficient | | | | offer for you to Fannie Mae. You can find further |
| funds to lend to home buyers at low rates. | | | | listings of Fannie Mae Properties is available online at |
| Along with Freddie Mac, it's the main secondary | | | | Making Offers to Fannie Mae |
| lender in the country. As the Fannie Mae web page | | | | The process is the same as with conventional deals. |
| states, "Our job is to help those who house | | | | Fannie Mae can accept or reject your offer or make |
| America." | | | | a counter-offer. Typically, there are several rounds of |
| The History of Fannie Mae | | | | offers and counter-offers. A benefit of negotiating |
| To give you a historical perspective. Fannie Mae was | | | | with Fannie Mae is that, unlike HUD or VA |
| created by President Franklin D. Roosevelt and | | | | negotiations, you're able to add contingencies and |
| Congress in 1938. At that time, there wasn't a | | | | other conditions to your offer. |
| consistent supply of mortgage funds. As a result of | | | | Here are two examples of contingencies: |
| the Depression, millions of families risked losing their | | | | Example 1: You can ask for a professional home |
| homes or couldn't become home owners. | | | | inspection after the offer is accepted. |
| So, the federal government established Fannie Mae | | | | Example 2: You can negotiate terms, down payment |
| to address this need. Its aim was to "expand the | | | | and financing. |
| flow of mortgage funds in all communities, at all | | | | Note: Fannie Mae will not accept a contingency that |
| times, under all economic conditions, and to help | | | | requires the prior sale of a seller's current |
| lower the costs to buy a home." | | | | property.Source: |
| In 1968, Fannie Mae was re-chartered by Congress | | | | In terms of financing for these properties, Fannie |
| as a shareholder-owned company. It's funded solely | | | | Mae offers its own REO financing, but the terms are |
| with private capital raised from investors on Wall | | | | usually no better than conventional sources. This |
| Street and around the world. | | | | means that buyers may be able to get better terms |
| Types of Fannie Mae Properties | | | | if they come into a deal with outside financing. |