Final answer:
Fannie Mae does not recognize subprime loans, including the notorious NINJA loans, which lack evidence of the borrower's income, job, or assets. These loans do not meet FNMA's more stringent borrower qualification standards.
Step-by-step explanation:
Fannie Mae (FNMA) does not recognize certain types of loans, particularly those considered to be subprime loans. Subprime loans are often characterized by low or zero down payment, minimal scrutiny of the borrower's reliable income, and potentially low payments for the initial period followed by significantly higher payments thereafter. These types of loans gained notoriety in the mid-2000s and were sometimes referred to as NINJA loans, indicating that the borrower had No Income, No Job, or Assets. FNMA's standards for mortgage loans require more stringent borrower qualifications to ensure loan repayment, thus subprime and NINJA loans typically fall outside of their purchasing criteria.