In the 1970s, who developed uniform rules for mortgage underwriting?

• A. FHA and VA
• B. Fannie Mae and Ginnie Mae
• C. Fannie Mae and Freddie Mac
• D. Freddie Mac and Fannie Mae

Answer: (C)

Uniform underwriting standards ensure lenders evaluate loans using the same criteria so they can be sold to the secondary market. In the 1970s, Fannie Mae and Freddie Mac established these uniform rules for mortgage underwriting, setting consistent expectations for borrower credit, income verification, assets, debt levels, and property requirements. This standardization made it easier for lenders to qualify loans and ensured they’d be eligible for purchase by these two government-sponsored enterprises, which increased market liquidity and reduced risk. FHA and VA have their own loan programs with separate guidelines, while the pair that created the uniform rules for conventional loans is Fannie Mae and Freddie Mac.