Tandem Plan

Tandem Plan,

Definition of Tandem Plan:

  1. A tandem plan was a mortgage purchase program subsidized by the U.S. government. Under a tandem plan or program, the Government National Mortgage Association (GNMA), colloquially known as Ginnie Mae, bought mortgages at a discounted market price and then sold them through the Federal National Mortgage Association (FNMA), better known as Fannie Mae and the Federal Home Loan Mortgage Corp. (FHLMC), usually called Freddie Mac.

  2. In effect, GNMA footed the difference between the purchase and sale price of the mortgages that it buys. This type of structure allowed for extremely low interest rates, making the loans available to aspiring homebuyers who would not be able to afford them otherwise.

  3. A United States subsidized mortgage purchase program where the loans enable builders and developers to create non-profit public housing.

Meaning of Tandem Plan & Tandem Plan Definition