Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market - effectively decreasing the demand for non-conforming loans.
Conforming Loan Limits:
|Number of Units||Maximum original principal balance||Alaska, Guam, Hawaii, and U.S. Virgin Islands only|
NOTE: The conforming loan limit in Alaska, Hawaii, Guam and the Virgin Islands is 50% higher.