Pledges to Help Raise Minority Homeownership
Rate to 55 Percent Over Next Ten Years
First Phase to Focus on Creating 6 Million First-Time Homeowners
With 1.8 Million New Minority Homeowners Over the Next Ten Years
WASHINGTON, Jan. 27 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM), the
nation's largest source of financing for home mortgages, today joined its
partners to announce its pledge to help 6 million families -- including 1.8
million minority families -- become first-time homeowners over the next
decade. The pledge boosts the company's commitment to President George W.
Bush's Minority Homeownership Initiative and will help raise the minority
homeownership rate from 49 percent currently to 55 percent, with the ultimate
goal of closing the gaps between minority homeownership rates and non-minority
homeownership rates entirely.
Fannie Mae's new commitment to first-time home buyers is part of the next
stage of the company's "American Dream Commitment," a plan announced in 2000
to provide $2 trillion in private capital for 18 million minority and
underserved Americans to own or rent a home by the end of the decade. Having
met the $2 trillion goal and the company's previous Trillion Dollar Commitment
launched in 1994, Fannie Mae, along with many others -- including its lender,
mortgage insurer, non-profit, real estate, home builder, housing finance
agency, and other federal, state, and local government partners -- has now
provided over $3 trillion in funds for over 28 million underserved families in
10 years. In 2003 alone, these strong partnerships allowed Fannie Mae to
achieve a record level of more than $240 billion in mortgage purchases serving
minority families.
"After the greatest year in housing and mortgage finance history, we are
renewing and increasing our American Dream Commitment," said Franklin D.
Raines, Chairman and CEO of Fannie Mae. "We and our housing partners have
bold ideas and big plans to work on the toughest housing problems facing
America. The first phase will emphasize getting people -- especially minority
families -- into homes of their own."
"Over the past ten years, the $3 trillion in commitments Fannie Mae has
made and met have transformed us into a completely different company, where
underserved families are the core of our business," Raines said. "Now that we
have the capital, the tools, and a wide range of committed housing partners,
Fannie Mae is pushing to do more with bold ideas and big plans to really move
the minority homeownership rate."
Under the three-phase American Dream Commitment expansion plan, Fannie Mae
will pledge significant new resources through several dozen new and enhanced
mortgage initiatives to achieve these goals. Over the course of the next few
weeks, the company will be announcing additional plans to achieve these goals:
* Expand access to homeownership for millions of first-time home buyers
and help to raise the minority homeownership rate to 55 percent with the
ultimate goal of closing the homeownership gaps entirely;
* Make homeownership and rental housing a success for millions of families
at risk of losing their homes; and
* Expand the supply of affordable housing where it is needed most.
Under the first phase announced today, Fannie Mae will help create 6
million new homeowners including 1.8 million new minority homeowners. This
goal will require the company to increase its average annual financing of
first-time home buyers by more than 250,000 households -- an increase of more
than 70 percent over the annual average for the first four years of this
decade -- and increase its average annual financing of minority first-time
home buyers by more than 93,000 households -- to a level more than double the
annual average for the first four years of the decade.
In addition, the company announced today a comprehensive set of additional
goals and objectives designed to increase opportunities for homeownership and
to help lenders reach out and serve more first-time home buyers. Steps Fannie
Mae outlined to achieve this goal include applying technology to lower the
costs of mortgage originations and expand access to mortgage credit, building
stronger partnerships with those who serve as trusted advisors to first-time
home buyers, adapting products and processes that build upon public sector
assistance to potential home buyers, and working to transform manufactured
housing lending:
Apply Technology to Increase Access and Readiness
* Help lender customers reduce the cost of originating a mortgage by an
additional $500 while driving toward a paperless mortgage process that
is more efficient, more effective, and more transparent for all
borrowers. In partnership with lenders and service providers, the
company will leverage technology products and services to streamline the
process of originating, processing, closing, and funding a mortgage.
* Use Fannie Mae's automated underwriting system, Desktop Underwriter(R)
(DUTM), to expand, streamline, and process more efficiently those Fannie
Mae affordable housing products -- including MyCommunityMortgage(TM)
that serve America's increasingly diverse population of low- and
moderate-income and underserved home buyers -- including purchasers of
homes in rural areas, and homes for people with disabilities. Further
expand the availability of low-down payment products in DU and commit to
offer underwriting based on non-traditional credit through DU.
* Double the ten-year commitment to provide mortgage financing to people
with disabilities from 10,000 to 20,000. Achieve this by: offering its
single-family products for these households -- including Community
HomeChoice(TM) and Community Living(R) -- to more lenders, integrating
this effort into the Home Counselor Online(TM) (HCO) technology and
Emerging Markets strategy, preparing new marketing materials, and
building stronger partnerships with the national, state, and local
groups who work with people with disabilities.
* Expand access to Fannie Mae's HCO technology -- the company's free,
automated client tracking and counseling support software -- by linking
to more than 5,000 counseling agencies and lenders who will, in turn,
serve more than one million clients. Create direct electronic links
between counselors and lenders to ensure the smooth transition from
counseling to an affordable mortgage with a goal of converting at least
100,000 of the HCO-assisted clients into first-time home buyers.
* Help lenders market to recent immigrants using underwriting
flexibilities that allow borrowers to apply for a home loan even before
obtaining permanent residency, and permit the inclusion of boarder
incomes and non-traditional credit histories in underwriting. Work with
lender and community partners to identify barriers to homeownership,
create new underwriting pilots to test additional approaches to serving
these communities, and offer new flexibilities through DU. Create
marketing materials for lenders and other partners in at least five more
languages in addition to English and Spanish.
* Provide liquidity to its lender partners' Community Reinvestment Act
(CRA) activities by increasing the company's goal to finance loans to
households and areas designated as low- and moderate-income under CRA
from $530 billion to more than $1.5 trillion, and by expanding its
current $20 billion commitment for targeted lender CRA efforts to
provide an additional $30 billion over the remainder of this decade.
Reaching out to lender partners to help them address their CRA goals is
not only good business; it is crucial for helping Fannie Mae meet its
own housing goals.
Build Stronger Partnerships with Lender Customers and Trusted Advisors
* Work with lenders and other community-based partners to ensure that all
borrowers have access to responsible, affordable lending alternatives in
every community. As a significant step toward this vision, Fannie Mae
will develop a "workforce housing initiative," and expand its focused
homeownership initiative called Emerging Markets to more than 30
metropolitan areas with the largest populations of minorities and new
Americans.
* Expand the number of Faith-Based partnerships in which Fannie Mae
participates from the current goal of 100 to 250 by the end of the
current decade.
* Re-affirm the company's commitment to strengthen the roles of Community
Development Financial Institutions in their communities through deeper
partnerships and technical assistance, and increase the current goal by
50 percent to $150 million in investments over the current decade.
Expand Homeownership Opportunities Through Public/Private Partnerships
* Create new local partnerships and technology solutions that incorporate
the Administration's "American Dream Down Payment" program -- recently
enacted by Congress -- into the company's affordable housing lending
products. Expand similar initiatives to increase access to other
sources of homeownership assistance such as Section 8 homeownership
vouchers, Individual Development Accounts, and subordinate financing
provided by state and local governments.
* Continue to partner with state and local housing finance agencies in
support of their affordable housing programs serving lower-income,
first-time home buyer, and other targeted groups, both through Fannie
Mae's role as the nation's largest purchaser of tax-exempt mortgage
revenue bonds (MRBs) and through the development of other innovative
affordable housing partnerships.
* Create a new module in HCO that will allow counselors to provide low-
income working families with useful information about the Earned Income
Tax Credit and help eligible consumers to receive these credits.
Transform the Manufactured Housing Market
* Transforming the manufactured housing market is critical to ensuring
access to low-cost homeownership for a large part of the population,
especially seniors and people living in rural communities. Manufactured
housing financing has experienced considerable instability over time,
and some parts of the market are characterized by predatory lending
practices and other anti-consumer features, such as faulty installation
of the home without sufficient purchaser recourse.
* As a first step toward a broader transformation, Fannie Mae will work
with its lender partners and other industry participants, and will
develop at least one new pilot approach within the next year with a goal
of the pilot to save consumers at least 10 percent of the cost of buying
and financing a manufactured home.
Fannie Mae is a New York Stock Exchange company and the largest non-bank
financial services company in the world. It operates pursuant to a federal
charter and is the nation's largest source of financing for home mortgages.
Fannie Mae is working to shrink the nation's "homeownership gaps" through a $2
trillion "American Dream Commitment" to increase homeownership rates and serve
18 million targeted American families by the end of the decade. Since 1968,
Fannie Mae has provided $5.9 trillion of mortgage financing for 60 million
families. More information about Fannie Mae can be found on the Internet at
http://www.fanniemae.com.
American Dream Commitment(R) is a registered Fannie Mae. Unauthorized use
of this mark is prohibited.
DUTM is a trade mark of Fannie Mae. Unauthorized use of this/these marks
is prohibited.
MyCommunityMortgage(TM) is a trade mark of Fannie Mae. Unauthorized use
of this mark is prohibited.
Desktop Underwriter (R) is a registered of Fannie Mae. Unauthorized use
of this mark is prohibited.
Community HomeChoice(TM) is a trade mark of Fannie Mae. Unauthorized use
of this mark is prohibited.
Community Living(R) is a registered of Fannie Mae. Unauthorized use of
this mark is prohibited.
Home Counselor Online(TM) is a trade mark of Fannie Mae. Unauthorized use
of this mark is prohibited.
Style Usage: Fannie Mae's Board of Directors has authorized the company
to operate as "Fannie Mae," and the company's stock is now listed on the NYSE
as "FNM." In order to facilitate clarity and avoid confusion, news
organizations are asked to refer to the company exclusively as "Fannie Mae."
SOURCE Fannie Mae
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Related links:
http://www.fanniemae.com
Company News On-Call:
http://www.prnewswire.com/comp/305450.html
CONTACT:
Janice Daue, +1-202-752-2131, or Raschelle
Burton, +1-202-752-4330, both of Fannie Mae
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