Definition of Freddie Mac:
Freddie Mac Loans in Orange County, California:
The Federal Home Loan Mortgage Corporation (FHMC), which is simply called Freddie Mac, is a private company and government-sponsored enterprise (GSE) that purchase loans from mortgage bankers, banks, credit unions and other lenders and then packages them together and sells them to outside investors in the secondary, “forward market” to insure that these same lenders have money on hand to continue funding new mortgage loans to borrowers. The ability for Freddie Mac to jump into this market is necessary to maintain the flexibility and liquidity of the entire U.S. mortgage market. Because Freddie Mac is willing to purchase both conforming and Jumbo loans from lenders, it allows banks to loan money at rates that are 3 - 4% lower than what a home-buyer would otherwise pay to a private or hard money investor. The loans that Freddie Mac purchases are called conforming loans because the loans conform to Freddie Mac guidelines.
The primary limit on the loans that Freddie Mac supports is the loans' size. Beginning January 1, 2009, $417,000 in California for most areas. The maximum loan amount for an Orange County single unit home is $625,500 and would be considered a Jumbo Loan, which means it is too big to conform to Freddie Mac conforming limits. High-Cost or Jumbo Mortgages in Orange County obviously come with higher interest rates and are an all around more expensive loan for the homeowner.