CHAPTER 6 About Loan Providers "The art of decision making includes the art of questioning.” – Pearl Zhu Conventional (non-government) loans come either from the lender's portfolio, outside investors, or are sold to Fannie Mae and Freddie Mac. Fannie and Freddie are the two government- sponsored real estate enterprises known also as GSEs. These are type of loans that are typically offered through Banks, Credit Unions and Mortgage Brokers. According the CFPB "A lender is a financial institution that makes loans directly to you. A broker does not lend money. A broker finds a lender." The GSEs are not government insured in the manner of the Federal agencies: The Federal Housing Administration (FHA) U.S. Department of Agriculture (USDA) and Veterans Administration (VA) Loans are government backed programs that can be provided through mortgage lenders and brokers. The VA also has a direct to borrower program. FHA Loan Programs FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) - which is part of HUD - insures the loan, so your lender can offer you a better deal. • Low down payments • Low closing costs • Easy credit qualifying FHA for first time home buyers
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