What is a tandem plan?

The

tandem plan is a type of strategy that allows building experts and developers to obtain funds needed to create non -profit public housing. This type of arrangement is used in the United States and includes an extension of what is called tandem loans through the federal government agencies. The Tandem Plan essentially allows the government's national mortgage association known as Ginnie Mae, to buy outstanding mortgages for rates that are below the current market value. Ginnie Mae can then sell these mortgages through a federal mortgage for a loan for housing or Freddie Mac or through the Federal Association of National Mortgage, also known as Fannie Mae. The final result is a greater ability to construct public housing in areas in which there is a lack of housing and making these units accessible to individuals who meet the basic qualifications criteria.

To be a tandem plan of the function, the applicant must receive a so -called tandem loan. Basicallyit is a loan that will expand to assets that already bring a certain type of debt obligation, while the balance of two loans is consolidated. While the tandem loan can be used for different types of loans out of the range of tandem plan, the goal is usually to help potential homeowners get financing that is available and in terms of limiting their income and budget, allowing more people to become homeowners.

In order for builders and developers to participate in a tandem plan, the Ginnie Mae for participation must meet the criteria. The development must be approved by the agency and meets all local building regulations as well as the quality standards set by Ginnie Mae. In addition, the builder or developer must also meet the credit requirements Place the agency and agree to the repayment conditions as mentioned by this agency. If all is well, he can buy a loanGinnie Mae and then restructure the debt obligation that can be sold Freddie Mac or Fannie Mae.

While the tandem plan is associated with the creation of public housing in the United States, this approach has a similar similarity to other public housing strategies used in other countries. The plan structure usually requires the purchase of a loan of one government and selling this loan to another entity, allowing public housing to provide basic residential areas for more citizens. The practicality of the tandem plan is a constant source of debate, and supporters believe that government intervention is necessary to ensure that household housing with lower income, and critics claiming that this approach can be manipulated in a way that benefits some but not necessarily all -partners.