Essay Sample on Fannie Mae: Helping Make Homeownership More Affordable

Introduction

The agency of interest is Fannie Mae. It serves the people who house America. The agency is the leading source of financing for mortgage lenders. The primary goal of Fannie Mae is to make more affordable mortgages available to buyers in the low and middle-income levels (An, Fisher, & Geltner, 2016). The agency buys loans from lenders of all sizes, from the large national banks and the small community lenders, including credit unions.

Agency Members

The agency attains its members through advertising the agency. As a government-sponsored entity, it acts as a link between banks and lenders, the federal government and the private investors. This way, their main members are the investors looking for capital to mortgage companies that they can lend to the homebuyers (An et al., 2016). They purchase most of their home loans in the United States.

Special Affiliation Services to Members

Fannie Mae helps in providing easy access to funds or liquidity to many banks, savings and loans entities and the mortgage companies (Listokin, 2018). This way, their members enjoy copious amounts of funds with easy access that they can use to lend the homebuyers. After purchasing most of the home loans in the United States, the agency holds them as their investment or package into mortgage-backed securities, which are then sold to the investors as secondary mortgage market.

Public Policy Category

Fannie Mae attempts to advance the public policy category of increased market stability, affordability and liquidity. The agency has its interests applied in policy development by helping people understand the importance of the secondary mortgage market (Listokin, 2018). The lenders tend to have less debt owed to them, which results in more funds originating new mortgages. The agency then has increased capital to buy more loans and the investor makes a profit from the interest they earn.

Association Conferences

Fannie Mae has made it known to people concerning their help for the homeowners. They have helped in smoothing the path to homeownership. Fannie Mae is a quiet mortgage giant that helps in maintaining stability, affordability and the liquidity of capital for the lenders to make home loans of high quality. The agency has thus helped many people become homeowners despite their low income.

Organizational Conferences

Fannie Mae has held organizational conferences to issue credit underwriting guidelines that will have a standardizing effect. The instructions will have an impact on conventional mortgage lending practices across the United States if they are accepted (Listokin, 2018). They are to restrict mortgage credit being issued by a 30-organizational coalition.

Watchdog Functions

Some watchdog functions of Fannie Mae include the use of CEO succession plans to divert the responsibilities of the chief executive to those of a president. However, the compensation did not fall under the congressional cap. To the agency, it meant that they appoint a separate person to take the role of a president.

Becoming a Member

To become a member of Fannie Mae as a homebuyer, one has to meet the minimum credit requirements eligible for backed mortgages. In the case of a single-family home as a primary residence, there is a need for a FICO score of 620 when the loan is fixed and 640 if it is adjustable.

Success at Influencing Public Policy

Fannie Mae has attained success in keeping the rates at their lowest and funds being available to the homebuyers throughout the United States. It has managed to free up lender capital for further loans and also attract secondary market investors.

References

An, X., Fisher, J. D., & Geltner, D. (2016). Cash Flow Performance of Fannie Mae Multifamily Real Estate: Evidence from Repeated NOI and EGI Indices. The Journal of Real Estate Finance and Economics, 52(4), 512-542. From https://www.researchgate.net/profile/Xudong_An/publication/280094040_Cash_Flow_Performance_of_Fannie_Mae_Multifamily_Real_Estate_Evidence_from_Repeated_NOI_and_EGI_Indices/links/55a88a3f08ae815a0421475f/Cash-Flow-Performance-of-Fannie-Mae-Multifamily-Real-Estate-Evidence-from-Repeated-NOI-and-EGI-Indices.pdf

Listokin, D. (2018). Fannie Mae and Other Influences on Housing Policy. Housing Policy Debate, 28(2), 317-319. From https://www.tandfonline.com/doi/abs/10.1080/10511482.2017.1358968?journalCode=rhpd20