What percentage coverage is Fannie Mae's insurance coverage based on?

Fannie Mae's insurance coverage is based on 100% of the loan amount. This level of coverage is designed to protect lenders against the risk of borrower default. When a mortgage is backed by Fannie Mae, the organization provides a guarantee that it will make payments to the lender in the event that the borrower cannot meet their obligations. This comprehensive coverage helps to stabilize the mortgage market by encouraging lenders to extend credit to borrowers who may not otherwise qualify for traditional financing, ultimately promoting homeownership.

The structure of Fannie Mae’s insurance guarantees allows lenders to feel secure in their investments, knowing that they have a safety net in the case of defaults. This full coverage underscores Fannie Mae's role in providing liquidity and assistance within the housing finance system, fostering a more accessible mortgage lending environment.