1. Basics Flashcards
What are the four prime agency loans?
FNMA, FHLMC, FHA, VA, (and USDA)
What does FNMA stand for?
Federal National Mortgage Association (Fannie Mae)
What does FHLMC stand for?
Federal Home Loan Mortgage Corporation (Freddie Mac)
What does FHA stand for?
Federal Housing Authority
What does VA stand for?
Veteran Affairs
Why was the FHA created and when?
To encourage wider home ownership, improve housing standards, and create better methods for financing. After Great Depression
Why was FNMA created and when?
1933, FDIC started insuring banks; FNMA bought FHA loans to free up capital
Why and when was VA home loan program created?
After 1944 demand for housing was high; VA allowed low interest high LTV loans for vets
Why and when was FHLMC created?
1971 to give competition to FNMA on the secondary market
Who backs FNMA and FHLMC?
The US Government
What are the Conventional Agency loans? What does this mean?
FNMA and FHLMC- loans can be bought on secondary market
What are the Government Agency loans?
FHA, VA, and USDA
What are the 4 loan purposes?
Purchase; Refinance; Construction; Construction-Permanent
What are the two types of Refinances?
Rate and Term- all proceeds used to pay off existing mortgage, closing costs, prepaids, and subordinate liens
Cash-Out- proceeds of loan pay off existing mortgage, closing costs, and additional cash for whatever they want
3 types of property purposes
Primary Residence- physically occupies and uses as primary home
Secondary Residence- vacation home or similar where resident lives part time; must be significantly distanced from first prop
Investment- borrower does not reside and it generates income
