Final answer:
The Federal Housing Finance Agency indeed determines underwriting guidelines for conforming loans, which are essential for mortgages to be eligible for purchase by government-sponsored enterprises like Fannie Mae and Freddie Mac.
Step-by-step explanation:
It is true that the Federal Housing Finance Agency (FHFA) determines underwriting guidelines for conforming loans.
Conforming loans refer to mortgages that adhere to the financing limits and criteria set by FHFA and meet the funding criteria of Fannie Mae and Freddie Mac.
The purpose of these guidelines is to ensure that the loans that meet these criteria are eligible to be sold to these government-sponsored enterprises, thus providing a consistent and stable form of financing for mortgage lenders.