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Fannie Mae Plans $2-Trillion Program

March 16, 2000|From Reuters

ATLANTIC CITY, N.J. — Fannie Mae , the largest U.S. provider of home financing, pledged Wednesday to buy, over 10 years, $2 trillion in mortgages to lower-income groups to make it easier for 18 million families to own a home.

The agency said the program, called the "American Dream Commitment," will target minorities, young families, new immigrants, families headed by women and other population segments lagging in homeownership.

Fannie Mae said its goal is to extend a hand to the many Americans who have not benefited from the current economic expansion, including residents of economically depressed urban and rural areas.

Fannie Mae and rival Freddie Mac have been under pressure from U.S. regulators to do more to help lower-income groups buy homes.

Officials said the agency would spur lending by offering flexible mortgage loan products and forming partnerships with foundations, local governments, developers and community-based lenders.

The plan is the second such program to be unveiled by the agency in recent years. In 1994 it allocated $1 trillion over seven years to help 10 million families in underserved population segments buy homes.

Fannie Mae and Freddie Mac operate under a government charter to expand homeownership, buying mortgages from banks and other lenders and packaging them into securities for sale to investors.

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