These loans are conventional loans that meet bank-funding criteria set by Fannie Mae (F.N.M.A.) and Freddie Mac (F.H.L.M.C.). Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. 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 HERE (if above these amounts, see JUMBO mortgage section)