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REALTORS CAN HELP PROMOTE ENERGY EFFICIENT LOANS, FANNIE MAE SAYS

 WASHINGTON, April 26 /PRNewswire/ -- If energy efficient mortgage programs are going to gain popularity, there needs to be uniform guidelines and criteria for determining whether or not a property qualifies as energy efficient, a representative of the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) told members of the National Association of Realtors Residential Finance Subcommittee today. Nearly 7,000 Realtors from around the country are attending the 1993 NAR Midyear Conference and Trade Exposition here, April 23-28.
 Chip Coffay, mortgage standards manager for Fannie Mae, told Realtors that several financial institutions and organizations have joined forces to create the National Collaborative, a non-profit organization that is addressing issues surrounding energy efficient mortgage programs. Those issues include the establishment of standard guidelines and criteria for qualifying a home or identifying what upgrades would be required so it could qualify as energy efficient. The group also is interested in promoting energy efficient mortgage programs.
 "If energy efficient mortgages are to become more prominent and more marketable, then this type of information is important," said Coffay because it would help buyers become better informed when choosing a home.
 "Realtors are in a unique position with the public. Often times, buyers are inexperienced and don't really know much about (the process) they're going through. They rely on the Realtor for guidance. Realtors can be there as promoters" for these types of loan programs, he added.
 Energy efficient mortgage programs are based on the premise that lower monthly utility bills mean more money in a homeowner's pocket that could be applied to a mortgage payment. As a result, energy efficient mortgage programs like the one Fannie Mae offers, means borrowers can increase their loan-to-ratio value because of a higher qualifying ratio for the purchase of a home that qualifies as energy efficient under a financial institution's own criteria. Some programs also allow borrowers to roll the cost of upgrading an older home so it can qualify as energy efficient.
 Because there are no uniform criteria or guidelines for determining what is and isn't energy efficient under these types of mortgage programs, Coffay told the Realtors that many times lenders, consumers and real estate professionals find themselves confused because the loan products offered by Fannie Mae, HUD, Freddie Mac and the Veterans Administration often vary in criteria.
 Often lenders, consumers and real estate professionals are not even aware of these types of programs, Coffay added. Coffay urged Realtors interested in finding out more about energy efficient mortgage programs in their area to contact their local utility company and lenders.
 Currently, Fannie Mae is monitoring pilot programs in Washington and Vermont. In Washington, tax-exempt bonds issued by the state's housing finance committee are being purchased by Fannie Mae to fund an energy efficient mortgage program for first-time buyers of new homes. Fannie Mae is also monitoring a program in Vermont supported by the state


housing finance agency that allows the borrower to include the cost of energy efficient improvements which are determined by a local energy rating firm, into the loan, Coffay said.
 In a separate presentation by Jane Stockinger of Freddie Mac's national policy administration office, efforts by the institution to help end discriminatory practices in the lending industry were discussed. The efforts have included revising and clarifying underwriting guidelines and increasing awareness of such problems in educational training, and are in response to the findings of a study completed two years ago that identified discrimination in the lending industry, she said. Freddie Mac also is reviewing the criteria it uses to help qualify potential borrowers for loans, she added.
 "Not all discrimination is intentional. Some just happens. It comes with misconception," Stockinger explained.
 "Each borrower is unique and must be looked at on a case-by-case basis," she said and added that Realtors should question the "cookie cutter mentality" if they are working with a buyer they feel should qualify for a loan but does not.
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 750,000 members involved in all aspects of the real estate industry.
 -0- 4/26/93
 /CONTACT: Annemarie Roketenetz, 202-383-7560, or Rose Matthews, 202-383-1136, both of the National Association of Realtors/
 (FNM)


CO: National Association of Realtors; Federal National Mortgage
 Association ST: District of Columbia IN: FIN SU:


IH-MH -- DC038 -- 0944 04/26/93 16:26 EDT
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Publication:PR Newswire
Date:Apr 26, 1993
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