shraddha
shraddha

@shraddhaha

6 tweets Apr 29, 2026
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doing a deep dive on indian housing vs US housing for something & am learning that housing finance in india and the US of A are so different (1/n)
in India, home loans are given out by banks & housing finance companies, kept on the balance sheet & EMIs are collected for 10-20 years
so the lenders are the ones owning the risk and outcome of the loans in the long term (2/n)
in the US of A, home loans are securitized via Fannie Mae & Freddie Mac. Fannie Mae, for eg, buys mortgages from lenders (who lend money to home buyers)
they then package those loans into mortgage backed securities
this means lenders/banks do not hold the risk for the long term. Fees from selling loans is how they make money (not the spread) (3/n)
the US of A is also a more mature market with a very high mortgage penetration compared to India, meaning most people who can take a mortgage already have a mortgage
and lenders make money by refinancing & recycling existing house loans (4/n)
in India, on the other hand, mortgage penetration is pretty low (due to a cultural preference for low debt and limited credit acces)
this means many people who could take loans have not entered the system yet & the market is still expanding (5/n)
wow u have an insane attention span if u read till till here

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