Fannie, Freddie will only purchase 'qualified mortgages' starting next year

Starting next January, Fannie Mae and Freddie Mac’s federal regulator will no longer allow them to purchase interest-only loans, loans with 40-year terms, or those with points and fees exceeding thresholds for “qualified mortgages” established by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Adoption of the new limitations on Jan. 10, 2014 “is in keeping with (the Federal Housing Finance Agency’s) goal of gradually contracting (Fannie and Freddie’s) market footprint and protecting borrowers and taxpayers,” FHFA said. Source: fhfa.gov.