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FANNIE MAE INTRODUCES NEIGHBORHOOD MORTGAGE PLAN, GIVING BOOST TO MINORITY AND LOW-INCOME LENDING

 FANNIE MAE INTRODUCES NEIGHBORHOOD MORTGAGE PLAN,
 GIVING BOOST TO MINORITY AND LOW-INCOME LENDING
 WASHINGTON, Oct. 19 /PRNewswire/ -- The nation's largest investor in home mortgages, the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM), announced today a new nationwide, neighborhood- based mortgage plan that will increase homeownership and promote revitalization in minority and low- and moderate-income urban areas. The plan, called FannieNeighbors, addresses recent findings that these neighborhoods are among the least likely to have access to mortgage credit.
 "The lack of available mortgage credit in the areas of the country that need it the most is a situation that must change," said Larry Dale, Fannie Mae's executive director of the National Housing Impact Division. "FannieNeighbors provides these communities a constant national source of affordable home loans that will encourage neighborhood stability."
 According to Dale, mortgages made by local lenders under the FannieNeighbors plan will require down payments of as little as 5 percent, flexible qualifying requirements, and less cash for closing costs than standard mortgage programs. To encourage economic diversity in neighborhoods, FannieNeighbors allows home buyers with a broad range of income levels to be eligible for the plan.
 FannieNeighbors is available to home buyers who live in areas where the U.S. Census Bureau indicates a minority population of at least 50 percent or areas with a median family income of no more than 80 percent of that of the metropolitan area.
 To aid lenders in identifying qualified neighborhoods, Fannie Mae has provided its customers a free software program called FannieMaps that shows census-based demographic and income information by neighborhoods.
 Borrowers who earn up to 140 percent of the area median income (150 percent or higher in certain high-cost areas) may be eligible for loans under FannieNeighbors.
 Families with incomes up to 115 percent of the area median may qualify for mortgages with as little as 3 percent of their own funds for a down payment under Fannie Mae's Community Home Buyer's Program with the 3/2 Option.
 Using FannieNeighbors, local lenders will make mortgages to buy or refinance homes. The program is not available for investor-owned properties.
 The National Bankers Association, the trade association for minority- and women-owned banks, advised Fannie Mae in the development of FannieNeighbors.
 Bruce Gamble, NBA president, said: "NBA formed a partnership with Fannie Mae in March to better serve minority and urban communities. We look forward to using the FannieNeighbors models to reach out to more minority and low-income families in urban areas who want to own a home."
 Mortgage insurance companies participating in the FannieNeighbors program include Commonwealth Mortgage Assurance Company, General Electric Mortgage Insurance Company, Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance Company, Republic Mortgage Insurance Company, and United Guaranty Residential Insurance Company.
 Any lender approved to make Community Home Buyer's Program mortgages may offer FannieNeighbors mortgages.
 FannieNeighbors flexibilities include:
 -- A down payment of 5 percent or of 3 percent from a borrower's own funds, with another 2 percent coming from gifts, grants, or loans to reach the 5 percent requirement, depending on income.
 -- Allowing housing expenses equal to 33 percent of a borrower's gross monthly income and total expenses between 38 and 40 percent of gross monthly income, depending on demonstrated borrower capabilities.
 -- Demonstration of a good credit history through non-traditional means, including regular payments to utilities and landlords.
 -- Allowing family members, nonprofit groups, and in some cases lenders to pay for closing costs or part of the down payment if the borrower lacks adequate funds.
 Lenders interested in offering FannieNeighbors mortgages should contact their Fannie Mae regional office.
 FannieNeighbors can be combined with federal, state, and local subsidized second mortgage programs such as the HOPE and HOME initiatives of the Department of Housing and Urban Development.
 Fannie Mae, the USA's Housing Partner, is a congressionally chartered, shareholder-owned company and the nation's largest investor in home mortgages.
 -0- 10/19/92 R
 /CONTACT: Tom Marder of Fannie Mae, 202-752-7608/
 (FNM) CO: Federal National Mortgage Association ST: District of Columbia IN: FIN SU:


MH -- DC009R -- 1637 10/19/92 13:17 EDT
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Date:Oct 19, 1992
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