Finance
Which government-sponsored enterprise (GSE) purchases conforming conventional mortgages in Virginia's secondary market?
AFHA and VA
BFannie Mae (FNMA) and Freddie Mac (FHLMC)✓ Correct
CGinnie Mae (GNMA)
DVirginia Housing only
Explanation
Fannie Mae and Freddie Mac are GSEs that purchase conforming conventional mortgages from lenders in the secondary market, providing liquidity. Ginnie Mae backs government loans (FHA, VA, USDA).
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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