Fannie Mae plans to aid first-time home buyers 100,000 households in area could qualify

May 19, 1993|By John B. O'Donnell | John B. O'Donnell,Washington Bureau Staff Writer David Conn contributed to this article.

WASHINGTON -- With consumer confidence about hom buying on the rise, a government-sponsored corporation that provides much of the money for mortgage lenders will launch a program in the Baltimore-Washington area Monday to attract low- and moderate-income renters to homeownership.

Designed for first-time home buyers who earn less than the median household income -- $44,000 in the Baltimore area and $59,200 in the Washington area -- the program will use a six-week advertising campaign to urge potential first-time home buyers to call a national 800 telephone number (1-800-688-HOME or 1-800-782-2729 for Spanish-speaking callers) for information.

Callers will be sent a 24-page booklet to help assess their eligibility for homeownership, along with a list of 44 mortgage lenders and 35 counseling services in the Baltimore-Washington area that have agreed to participate in the program.

James A. Johnson, chairman and chief executive of the Federal National Mortgage Association, known as Fannie Mae, said at a Washington news conference yesterday that research shows that fear of the mortgage process and lack of information form a barrier to homeownership for young, minority and lower-income families.

"Our campaign is designed for the first-time home buyer who needs help getting through what can be a very confusing and intimidating process," he said.

Lenders will not change their standards for granting mortgages, he said, adding that many applicants will probably be eligible for low down-payment mortgages designed for low- and middle-income families.

A Fannie Mae official said there could be 100,000 households in the Baltimore-Washington area that do not own their own homes but could qualify for homeownership.

There is "serious discrimination and a serious lack of outreach" to minorities in the mortgage financing system, Mr. Johnson said. The system "is not providing full credit opportunities -- particularly to blacks and Hispanics," he added.

At a similar news conference in Baltimore, Fannie Mae Vice Chairman Franklin D. Raines said the "campaign is an important step in Fannie Mae's effort to extend our franchise to more young and low-income home buyers than ever before in our history."

Baltimore Mayor Kurt L. Schmoke, who attended the briefing at the World Trade Center, said the program "is going to make a big difference in home ownership in the Baltimore area."

Fannie Mae is under regulatory pressure to buy at least 30 percent ofits loans from low- to moderate-income home buyers, Mr. Raines said.

Last year, he said, 25 percent of the company's $250 billion in mortgage purchases were in that category.

Fannie Mae does not make mortgage loans directly to home buyers. Instead, it buys mortgages from the lenders that originate them and then sells them in the secondary market.

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