 TITLE: How Do Fannie Mae and Freddie Mac Loans Work? CONTENT: How Do Freddie Mac Loans Work?\n------------------------------\nFreddie Mac, or the Federal Home Loan Mortgage Corporation, buys conventional loans from small banks. These are the guidelines that Freddie Mac establish for loans:\n*   Debt-to-income ratio up to 45%, although 33% to 36% is recommended\n*   Credit score of at least 620\n*   Down payment as low as 3% of purchase price for HomeOne loans, geared toward first-time buyers, and as low as 3% for Home Possible loans, designed for people such as first-time buyers, low-income borrowers and retirees\n*   PMI typically required when the homebuyer puts down less than 20% of home's purchase price END