Freddie Mac and Fannie Mae are the only secondary market enterprises, since they're the only ones Congress chartered to serve the secondary market, keeping money available for banks to make home loans.
It's a circle, put in place so that the lending system continues to work.
Some banks offer another type of mortgage, the portfolio loan.
If you have bad credit but have 20 to 25 percent to put down, you can buy property under this method, providing you place the property into a separate business entity, such as a corporation or limited liability company (LLC).
This option won't hurt your credit score as a sub-prime loan will, and such a loan will be reported on a business credit report, not your personal credit report (unless the loan becomes delinquent, in which case it may be reported on the personal report of anyone who is a guarantor of the note).
Also be aware that those who get their middle score to 700-plus can often use "stated income" to get the mortgage they desire.
Such an approach is attractive, since the use of stated income permits the borrower to forgo revealing previous tax returns.
Of course, alternative sources of home mortgage loans are available to those with poor credit, but the interest rates are often several points higher and the terms undesirable.
As explained, having these subprime lenders on your credit report will hurt your score as well, since FICO classifies them as undesirable.
I don't recommend these types of loans, especially considering that if you wait and repair your credit, you can obtain conventional funding anyway.
One exception would be a sub-prime loan used as leverage in any Debt Fusion plan.