Tandem Loan

Tandem loans were part of a subsidized mortgage program via Fannie Mae, a.k.a. the Federal National Mortgage Association, and Ginnie Mae, the Government National Mortgage Association. Ginnie Mae would buy mortgages for more than they were worth on the market, then Fannie Mae would resell them.

The issuing of tandem loans was a way the government helped to develop nonprofit, public housing projects. These government agencies took the loss as a way of providing financing to housing developers, as well as to-be homebuyers.

Tandem loans started in 1970, but aren’t a thing anymore. There are still other forms of home financing though, like the Homeownership and Opportunity for People Everywhere (Hope I) program.