DEFINITION of 'Tandem Plan'

A mortgage purchase program subsidized by the U.S. government. Tandem loans provide monetary assistance to builders and developers of non-profit public housing. Under the Tandem Plan, the Government National Mortgage Association (GNMA / Ginnie Mae) buys mortgages at discounted market price and then sells them through the Federal National Mortgage Association (FNMA / Fannie Mae) and the Federal Home Loan Mortgage Corp. (FHLMC / Freddie Mac).

BREAKING DOWN 'Tandem Plan'

Under the Tandem Plan, GNMA foots the difference between the purchase and sale price of the mortgages that it buys. This type of structure allows home buyers to receive low interest rate loans, often to those who would not be able to afford them otherwise.

RELATED TERMS
  1. Ginnie Mae Pass Through

    A type of investment issued by the Government National Mortgage ...
  2. Mortgage Originator

    A mortgage originator is an institution or individual that works ...
  3. Mortgage Banker

    A company, individual or institution that originates mortgages. ...
  4. Nonconforming Mortgage

    A mortgage that does not meet the guidelines of Government Sponsored ...
  5. RHS Loan

    A loan made by or guaranteed by the United States Department ...
  6. No-Cost Mortgage

    A mortgage refinancing situation in which the lender pays the ...
Related Articles
  1. Small Business

    Remodeling The Housing Finance Industry

    The meltdown in mortgage-backed securities is bringing about reform in home financing.
  2. Insights

    Fannie Mae, Freddie Mac And The Credit Crisis Of 2008

    Is the U.S. Congress' failure to rein in these mortgage giants to blame for the financial fallout?
  3. Personal Finance

    Shopping for a Mortgage in 2017? Use This Tool First

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2017 can all be done online.
  4. Investing

    Fannie Mae and Freddie Mac, Boon Or Boom?

    These two companies are crucial to the mortgage market, but are they ticking timebombs?
  5. Personal Finance

    Are mortgage-backed securities backed by any guarantees?

    Actually, any mortgage-backed security (MBS) guarantee depends on who issued it.To review, an MBS is a security, created through the process of securitization, in which the underlying assets ...
  6. Personal Finance

    When You Need a Jumbo or Super-Jumbo Mortgage

    Rising housing prices have made so-called jumbo and super-jumbo loans a necessity for more homebuyers.
  7. Personal Finance

    Millennials Guide: How to Pick the Right Mortgage

    Here’s help in finding the perfect, affordable loan for that home you have been dreaming about.
  8. Investing

    Financing Basics For First-time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  9. Personal Finance

    5 Things You Shouldn't Tell Your Mortgage Broker

    Applying for a mortgage can be a strenuous process. Here are five things to avoid doing when meeting with your mortgage broker.
RELATED FAQS
  1. What is a Ginnie Mae security?

    A Ginnie Mae, or Government National Mortgage Association security, functions similarly to the process of lending someone ... Read Answer >>
  2. How do you use the FNMA selling guide?

    Learn about Fannie Mae Selling Guide and find out details about how its parts provide support to the business relationship ... Read Answer >>
Hot Definitions
  1. Debt/Equity Ratio

    Debt/Equity Ratio is debt ratio used to measure a company's financial leverage or a debt ratio used to measure an individual ...
  2. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  3. Life Insurance

    A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the ...
  4. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  5. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  6. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
Trading Center