Which entity is not a primary lender?

• A. Fannie Mae
• B. Freddie Mac
• C. FHA
• D. Ginnie Mae

Answer: (D)

The question tests who actually lends money to borrowers versus who operates in the market in other roles. Primary lenders are the institutions that originate mortgage loans to homebuyers. Fannie Mae and Freddie Mac do not lend to borrowers themselves; they operate in the secondary market by buying mortgages from primary lenders and packaging them into securities. The FHA is a government program that helps borrowers by insuring loans made by private lenders, so it doesn’t lend directly either. Ginnie Mae, however, does not originate loans or purchase them; it guarantees mortgage-backed securities that are backed by government-insured or government-guaranteed loans. Because it doesn’t lend or securitize loans on its own, it isn’t a primary lender. That’s why Ginnie Mae is the correct choice.