Throughout the home loan process, you will hear mentions of mortgages in KC that are approved or owned by “Freddie Mac.” Freddie Mac, or the Federal Home Loan Mortgage Corporation, is one of several government-sponsored organizations that helps regulate the housing market by actively participating in the secondary mortgage market and providing educational resources to home buyers, owners, and the housing industry.
The Secondary Mortgage Market
Since the housing crisis, government entities such as Freddie Mac have dominated in the secondary mortgage market, as opposed to private investors. While the government is working to encourage private investors to take control of the mortgage market once again, Freddie Mac currently owns one in four home loans in the United States.
As active participants in the secondary mortgage market, Freddie Mac and Fannie Mae network with thousands of banks, savings and loans, and mortgage companies to ensure money continues to move throughout the economy.
Conventional vs. Government-Backed Mortgages in KC
Freddie Mac mortgages in KC are conventional loans. It is important to note that even if Freddie Mac has assumed your loan, your loan is not insured by the federal government. The US Treasury owns a majority of public shares but Freddie Mac operates independently.
Conforming loans (not to be confused with conventional loans) follow basic guidelines set forth by Freddie Mac and Fannie Mae that address the size of the loan as well as your:
These guidelines may vary depending on your location. For instance, there are standard conforming limits and high-cost area conforming limits for the size of your loan.
However, not all mortgages in KC that follow these guidelines are owned by Freddie Mac. Find out if Freddie Mac owns your home loan on their website.