The Federal National Mortgage Association (FNMA) is an agency within the Department of Housing and Urban Development that sets standards for underwriting and insures residential mortgage loans made by private lenders.

One of FHA's objectives is to make available affordable mortgages to those with low or moderate income. FHA loans may be high loan-to-value, and they are limited by loan amount. FHA mortgage insurance requires a fee of up to 3.8 percent of the loan amount to be paid either at closing or added to each monthly payment, as well as an annual fee of 0.5 percent of the loan amount added to each monthly payment. Fannie Mae buys mortgages from such lenders as banks and savings and loans, packages them, and resells them on the open market, thus creating fluidity and lessening lenders' risk.