Tandem Plan


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).


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.

  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Lender

    Someone who makes funds available to another with the expectation ...
  3. Conventional Mortgage

    A type of mortgage in which the underlying terms and conditions ...
  4. Ginnie Mae - Government National ...

    A U.S. government corporation within the U.S. Department of Housing ...
  5. Bank

    A financial institution licensed as a receiver of deposits. There ...
  6. Hedge

    Making an investment to reduce the risk of adverse price movements ...
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  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 Full Answer >>
  2. Do FHA loans have prepayment penalties?

    Unlike subprime mortgages issued by some conventional commercial lenders, Federal Housing Administration (FHA) loans do not ... Read Full Answer >>
  3. Can FHA loans be refinanced?

    Federal Housing Administration (FHA) loans can be refinanced in several ways. According to the U.S. Department of Housing ... Read Full Answer >>
  4. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  5. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>
  6. Does renters insurance cover water damage?

    An all-perils renters insurance policy does cover water damage, less the deductible, to personal property if the damage is ... Read Full Answer >>

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