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Texas Fannie Mae Expanded Approval mortgages may be a good option if you have less than perfect credit and/or minimal down payment funds. Fannie Mae is a publicly traded company (FNM) that was originally created by Congress in 1938 to help the housing industry during the depression. They do not make mortgage loans directly. Fannie Mae has designed programs to help more people own homes and also buys mortgages in the secondary market. The current loan limit for Fannie mortgages is $417,000.

An Expanded Approval mortgage will generally be several percent lower than a typical sub-prime mortgage. This can result in a lower payment and a huge savings over the life of a loan. Fixed or adjustable rate terms are available. There is also a feature that can result in an interest rate reduction if payments are on time for a specified period. (May not be available in some cases). This may eliminate the need to do a refinance with additional closing fees at a later date.

If you already have a mortgage with a high interest rate the Expanded Approval loan could be a good choice for a refinance. Depending on how long you expect to own your home it can be advisable to refinance if you can save percent or more on the rate.

Loan decisions for Expanded Approval are made be Desktop Underwriter (DU) and Desktop Originator (DO). These are basically software programs that evaluate mortgage applications. The software gives a recommendation of EA-I, EA-II, EA-III, or Refer W Caution IV. EA-I, II, and III generally qualify with I being the best rate or terms and II and III are a little higher.

Fannie Expanded Approval mortgages are not the best program for every situation. Some consumers with very good credit and/or a large down payment may be able to get a better rate with another program. Other customers with severe credit problems may not get approved for Expanded Approval and may need to go sub-prime. A good broker can help you find the best loan that you can qualify for. Customers in Texas can get more information at our Texas FannieMae Expanded Approval website. You can also call our office at 281-537-7800.

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