Fannie and Freddie: Helping Hands for the Manufactured Housing Industry
An integral part of buying a manufactured or modular home, acquiring a mortgage from certified lenders is just as important as finding the floor plan of your dreams. After the housing crisis of less than a decade ago, lending and the ethics involved with borrowing money were closely examined. Since then, lenders and borrowers both have learned and grown more conscious of their decisions, seeing the impact their choices make firsthand.
Taking the hardships from the bubble burst into account, government assistance and insurance on mortgage options help manufactured home buyers choose the right financing options for their current needs. While most are familiar with financing in general, most are unaware of the big names behind the scenes that actually ensure government assistance in the first place.
Fannie Mae and Freddie Mac: Manufactured Home Loan Backers
Fannie Mae is a name that gets referenced regularly on political discourse shows and the finance channel, but many Americans only have a faint idea of what those words really mean. Fannie Mae is actually a federal government organization, Federal National Mortgage Association (FNMA) that helps set lending standards and buys loans on the secondary mortgage market. This process puts more liquidity in the market. Banks get their money back from loans faster, and in turn are more willing to give loans out to more customers. More money for mortgages means more people have access to financial help when buying a manufactured home.
This constant refilling of available funds, ideally, keeps money flowing through the industry and prevents staling of the market. As a result, Fannie Mae’s interest rates, loan policies, and business practices directly affect the housing market. The housing market booming or crashing has the power to influence the economy at large, as observed in the 2008 housing bubble burst. Fannie Mae actually has a pivotal role in protecting consumers at every level of income finance their modular home, mobile home, and manufactured home loans.
The other side of the government’s housing market agencies is Freddie Mac, who gets almost as much screen time on those same political shows as his sister. The Federal Home Loan Mortgage Corporation is a government-sponsored enterprise, much like Fannie Mae is. This is a business that has special privileges and allowances from the government, such as little to no tax payments. In exchange, the government is allowed to appoint certain members to the board of directors, and Fannie and Freddie are under regulation from the Federal Housing Finance Agency, not to mention the Department of Housing and Urban Development.
Freddie functions very much the same as his sister, with the only difference being where and with whom they do their business. Whereas Fannie works with major lenders and banks to secure their portfolio of mortgages, Freddie typically buys from smaller banks and lenders that require more of that government help to support their communities with mortgage access.
Government Backed Loans that Get You the Home you Deserve
While Freddie and Fannie work for the entire housing market, their involvement in the manufactured, modular, and mobile home industry is very much what makes the mortgages that smaller banks and licensed lenders more capable to provide money for mortgages to each of their customers. Without the secondary mortgage market, financing options would be far more limited and reserved for only those who could pay the money off in a much shorter term than the thirty-year financing plans a majority of homeowners in the US enjoy now.
So long as there is great involvement and scrutinization in the market by its government agencies responsible for ethical lending, Fannie Mae and Freddie Mac will continue to be the helping hands and useful tools to solve the American housing need.