Tandem Mortgage Plans: A Government-Sponsored Housing Assistance Program
Duo Strategy Explained: Its Function and Operation
Tandem mortgage plans, initially introduced in the 1970s, were a subsidized home loan purchase program initiated by the Government National Mortgage Association (GNMA)—commonly known as Ginnie Mae. These plans aimed to make homeownership more attainable for those who might have struggled with high-interest rates.
Under the tandem plan, Ginnie Mae would buy mortgages at discounted market prices, covering the difference between the purchase and sale prices through a unique partnership with the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corp (FHLMC), commonly referred to as Fannie Mae and Freddie Mac, respectively. This structure facilitated exceptionally low-interest home loans, making buying a home possible for aspiring homeowners who would otherwise be financially excluded.
GNMA first launched a series of tandem plans in 1970, later formalizing the major program with the passage of the Emergency Home Purchase Assistance Act in 1974. The official program, known as the Brooke-Cranston GNMA Tandem Plan, primarily focused on conforming loans. Although the Brooke-Cranston Tandem Plan no longer funds new loans, the concept of special assistance programs remains potential options in case the mortgage money supply becomes overly restrictive.
Key Points
- Tandem plans originated to provide funding for affordable housing projects.
- The Brooke-Cranston GNMA Tandem Plan, introduced in 1974, focused on conforming loans.
- Project collaborations often take place alongside state or federal programs addressing housing insecurity.
- New loans in their original format are not currently accessible, but similar aid programs for buyers are still available.
How Tandem Mortgage Plans Operated
Tandem mortgage plans provided financial aid to builders and developers of non-profit public housing. Such projects could qualify for interest reduction payments, regardless of whether they were financed with HUD-FHA insured mortgages or not. As long as the project's organization and operations adhered to state or local programs that weren't inconsistent with the National Housing Act, HUD-FHA would recognize the projects.
It is important to note that low-income families, disabled individuals, and the elderly may qualify for housing vouchers—funds that help provide safe and clean housing for people who cannot afford market rents.
Alternatives to Tandem Mortgage Plans
Although new tandem loans are no longer an option, federal programs for rental housing such as the Housing Choice Voucher Program have been implemented to help compensate. With the Housing Choice Voucher Program, very low-income families, the elderly, and the disabled can afford decent, safe, and sanitary housing in the private market. Participants choose their own living arrangements, including single-family homes, townhouses, or apartments, as long as they meet the program requirements and are not limited to subsidized housing projects.
Definition: Tandem Mortgage Loan
A tandem mortgage loan plan is a government-subsidized program designed to aid in the creation of affordable housing.
Eligibility for Housing Vouchers
Housing choice vouchers are part of a federal program specifically designed to help very low-income families find and afford safe rental housing.
Availability of Tandem Mortgage Loans
Regrettably, as of 2025, there are no new tandem mortgage loans available. However, comparable programs focused on helping buyers are still in existence.
The Final Word
The tandem mortgage plan was a U.S government-run loan purchase program in which GNMA bought mortgages below the market price and then sold them through FNMA and FHLMC. The difference between the purchase and sale prices was covered by GNMA, enabling buyers who would otherwise not have been able to afford a mortgage to acquire a home. Tandem plans primarily assisted builders and developers of non-profit public housing—an initiative aimed at aiding affordable housing in the United States. The original Tandem Plan has been largely transitioned out, but its legacy endures in the form of mortgage-backed securities and ongoing government support for affordable housing finance.
- Despite the discontinuation of new tandem mortgage loans, alternative government programs, such as the Housing Choice Voucher Program, offer financial aid for very low-income families, the elderly, and the disabled to afford decent housing in the private market.
- Tandem mortgage loans, originally government-subsidized programs, aimed to promote affordable housing by assisting builders and developers of non-profit public housing, offering interest reduction payments to help make housing more accessible for specific demographics.
