Government agencies and maturity limits – Where do GSEs fall?

Lately, NAFCU has received questions from credit unions, sometimes stemming from examinations coming out of Region 5, about maturity limits for non-owner occupied homes. We blogged about some maturity limit exceptions a while ago, but unless an exception applies, the maturity limit for loans made by federal credit unions is 15 years. There are 20 year maturities and up to 40 year maturities available for some owner occupied loans, which may be the exceptions utilized most often by federal credit unions.

One exception that keeps coming up lately relates to loans that are “secured” by the “insurance or guarantee of, or with an advance commitment” to be purchased by a Federal or State government or “agency of either,” here’s the relevant excerpt from section 701.21(e):

(e) Insured, Guaranteed and Advance Commitment Loans. A loan secured, in full or in part, by the insurance or guarantee of, or with an advance commitment to purchase the loan, in full or in part, by the Federal Government, a State government or any agency of either, may be made for the maturity and under the terms and conditions, including rate of interest, specified in the law, regulations or program under which the insurance, guarantee or commitment is provided.

For example, some FCUs make loans under various Small Business Administration programs, which may fall into this exception. But what about government sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac?


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