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TREASURER MALONE ANNOUNCES MASSACHUSETTS LENDERS IN NEW 'AMERICAN DREAM' MORTGAGE PROGRAM WITH FANNIE MAE

 TREASURER MALONE ANNOUNCES MASSACHUSETTS LENDERS IN NEW
 'AMERICAN DREAM' MORTGAGE PROGRAM WITH FANNIE MAE
 BOSTON, Feb. 4 /PRNewswire/ -- Massachusetts State Treasurer Joseph Malone today announced 29 lenders statewide who will make available $125 million in mortgages to about 1,000 moderate-income households in the state. The funds are made available through the Treasurer's new American Dream program announced in January, and Federal National Mortgage Association (Fannie Mae) (NYSE: FNM), the nation's largest investor in home mortgages.
 "This is a win, win, win program. It is a win for the state pension fund which we will be investing in triple A rated Fannie Mae Mortgage-Backed Securities (MBS). It is a win for the home buyers of Massachusetts who now have a program to help them buy the home of their dreams. And it is a win for the Commonwealth of Massachusetts in a program that will provide a boost for its economy," said Malone.
 Martin D. Levine, Fannie Mae senior vice president for low- and moderate-income housing, said: "Fannie Mae is delighted to work with Treasurer Malone, private lenders, and the people of Massachusetts to help make homeownership a reality for more families. The American Dream initiative helps home buyers over what is often the biggest obstacle to homeownership -- the downpayment."
 Under the American Dream program using Fannie Mae's Community Home Buyers model, families need to put down just 5 percent of the home purchase price.
 State employees and state teachers who participate in the Massachusetts public pension fund and who earn 115 percent of the area's median income will be eligible for the "3/2 Option" under the Community Home Buyer's program. With the 3/2 option, borrowers can put down 3 percent of the house price, with 2 percent coming as a gift from a relative or non-profit agency.
 Other key features of Fannie Mae's Community Home Buyer's initiative as applied to the American Dream program:
 -- Borrowers can spend up to 33 percent of their income on housing costs, and 38 percent of their income on overall obligations. The standard guidelines allow no more than 28 and 36 percent, respectively.
 -- Home buyers need less cash to get into a home because of reduced closing costs and a waiver of the standard requirement for two months of mortgage payment savings.
 -- Families with incomes up to the lesser of 135 percent of their area's median income or $68,000 are eligible to get a loan under this initiative.
 Since Treasurer Malone announced the American Dream idea in December, 29 lenders have committed to make the $125 million in mortgages, and more than 5,000 home buyers have called the treasurer's office for information.
 Under the American Dream program, the treasurer will invest a portion of the state's public pension fund in Fannie Mae Mortgage-Backed Securities (MBS) that are formed by pooling mortgages made under the program. In so doing, the treasurer helps support affordable housing in the state while making a sound investment for the fund's contributors.
 For a list of lenders participating in Massachusetts State Treasurer Joe Malone's American Dream program, home buyers may call Fannie Mae at 800-7-FANNIE.
 Fannie Mae's participation in Treasurer Malone's American Dream program is part of the company's initiative to invest $10 billion in moderate-income and special needs housing by 1993. Fannie Mae Chairman James A. Johnson announced the initiative in March 1991.
 Fannie Mae, the USA's Housing Partner, is a congressionally chartered, shareholder-owned company, and is the nation's largest investor in home mortgages.
 -0- 2/4/92
 /CONTACT: Janice Daue of Fannie Mae, 202-752-3421/
 (FNM) CO: Fannie Mae ST: Massachusetts IN: FIN SU:


TW -- DC016 -- 6603 02/04/92 10:42 EST
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Date:Feb 4, 1992
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