Casa Academy

Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.

Fannie Mae

Fannie Mae (Federal National Mortgage Association) is a government-sponsored enterprise that buys conforming conventional mortgages from lenders on the secondary market, providing liquidity so banks can originate new home loans under standardized underwriting guidelines.

Exam context

Identify Fannie Mae as a secondary market buyer, not the agency that insures FHA loans. FHA is HUD-related insurance; Fannie Mae purchases conventional conforming paper.

Secondary market role

Lenders originate mortgages then sell them to Fannie Mae or Freddie Mac when loans meet size, documentation, and credit standards. Servicers may continue collecting payments for investors. This cycle keeps mortgage money available nationwide beyond local bank deposit limits.

Conforming guidelines

Fannie Mae publishes seller guides covering appraisal, income verification, and property standards. Loans above conforming limits are jumbo products outside GSE purchase unless high-balance exceptions apply in designated counties.

Examples

  • Loan sale after closing

    A credit union closes a 30-year fixed loan meeting GSE standards and sells it to Fannie Mae, then uses proceeds to fund another borrower's purchase.

  • Conforming limit

    A buyer's loan amount sits at the published conforming ceiling for the county, allowing lower rates and GSE purchase eligibility compared with jumbo financing.

Keep studying

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Related terms

  • FHA loansGovernment-insured program separate from GSE conventional purchases.
  • Conventional loanPrivate-market mortgage type often sold to Fannie Mae when conforming.

Related resources

Sources