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Yazar - Tarih: UrlaX.NET, 17 Mayıs 2008 00:32:25
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Business NewsNEW YORK (Reuters) - Fannie Mae, the nations largest source of home financing, said on Friday it is lowering the amount of down payments required on mortgages it purchases in areas where home prices are falling.


NEW YORK (Reuters) - Fannie Mae, the nations largest source of home financing, said on Friday it is lowering the amount of down payments required on mortgages it purchases in areas where home prices are falling.

Starting on June 1, the new requirements of 3 percent or 5 percent, which replace rules set in December, will apply nationally to loans on single-family primary residences, it said.

The rule change comes as many in the housing industry call for Fannie Mae and Freddie Mac , the second largest federally chartered home funding company, to make more affordable housing available.

The two government-sponsored, shareholder-owned companies buy mortgages, freeing up funds for more lending.

Fannie Mae "will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions," Marianne Sullivan, senior vice president of single-family credit policy and risk management, said in a news release.

U.S. home prices have fallen nearly 16 percent from their June 2006 peak, according to the Standard & Poors/Case-Shiller index of 20 metropolitan areas. The biggest losses are mainly in areas that had the most sweeping gains in the five-year record housing surge earlier this decade.

Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages through its automated underwriting system, and ratios of up to 95 percent for other loans.

A conforming mortgage meets the requirements for loans that Fannie Mae and Freddie Mac can purchase.

The size of these loans was temporarily increased in March by their regulator to as high as $729,000 in high-cost areas from $417,000, in an effort to stimulate lending in one of the worst U.S. housing markets since the Great Depression.

Mortgages that exceed that maximum size are jumbo loans.

Fannie Mae also said it will continue to allow loans with Community Seconds, one of various assistance programs, for up to 105 percent combined loan-to-value ratio.

With Community Seconds, a borrower has a second-lien mortgage to help cover down payment and closing costs, with funding usually provided by a state or local housing agency, employer or a nonprofit organization.

"We recognize that down payment assistance programs remain a viable tool for borrowers who can afford a mortgage long-term, but might need a little help getting started," Sullivan said.

On May 6, when Fannie Mae reported first-quarter results, it announced other initiatives, including a plan to provide up to $10 billion to help Housing Finance Authorities (HFA) serve first-time homebuyers "of modest means." In some cases, Fannie Mae said, it will buy HFA mortgages that have greater than 97 percent loan-to-value ratios.

(Reporting by Lynn Adler; editing by Jonathan Oatis)


(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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