Conforming Loans | Joplin MO

Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Both of these government owned companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, from October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a median priced home.

Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market – effectively decreasing the demand for non-conforming loans.