With all of the headlines in recent times about mortgage lenders tightening loan standards, the phrase GSE Backed Loans keeps popping up as a safe haven for lenders and borrowers alike. What is a GSE? Why are they liquid and other loans not available? How do I get a GSE loan and what should I know about GSE loans?

GSE backed loans are available up to $625500 for a single family residence in Alaska & Hawaii

GSE stands for Government Sponsored Enterprise, and is commonly used to refer to Fannie Mae and Freddie Mac. Fannie Mae was created in 1938 and Fredie Mac in 1970. Both are publicly traded companies and they both helps banks and lenders maintain their liquidity by purchasing conforming loans.

GSE backed loans have stated income programs available for those with very good credit ratings. These loans are meant for those who cannot easily document their true income and not for those who do not earn enough money to qualify otherwise.

GSE backed loans are offered through Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac both offer purchase financing loans with no money down to qualified borrowers. They also both offer their own version of "Expanded Approval" loans for borrowers with less than stellar credit.

There are GSE backed loans for investors available as well. These non-owner occupied loans typically require a minimum down payment of 10%. Multi-Unit financing can exceed the current limit of 417,000. Contact your mortgage professional for more details.

GSE backed loans offered through Fannie Mae and Freddie Mac have a lower interest rate than non-conforming loans. There are more buyers in the secondary market for Fannie Mae and Freddie Mac allowing the GSE's to offer the low rates on their loans.

 

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