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Fannie Mae, NAACP to aid blacks
By Marcy Gordon, Associated Press writer
WASHINGTON -- Seeking to help more black families become homeowners, mortgage giant Fannie Mae and the NAACP have formed a partnership that will provide up to $110 million in financing for families that can't afford big down payments.
Under the partnership announced yesterday, Fannie Mae will provide financing for qualified black borrowers who will be able to put down as little as 3 percent to 5 percent of a home's value. The new program also is designed to help at least 20,000 black families get information on home ownership.
Officials noted that while 73 percent of white families own their own home, only about 45 percent of black and Hispanic families are homeowners.
Fannie Mae also committed to finance an unlimited amount of mortgages for qualified families recommended by the National Association for the Advancement of Colored People, the nation's oldest civil rights organization.
Traditional credit requirements will be eased for black families whose credit histories were marred by burdensome medical expenses.
The move came a week after Fannie Mae offered new options making mortgage insurance cheaper for all homebuyers who cannot afford big down payments. Of the 150,000 borrowers, most of them first-time homebuyers who are expected to benefit from that change over the next year or so, an estimated 20,000 to 30,000 will be black or Hispanic.
"We put all of our will and wallet behind it," Franklin Raines, Fannie Mae's new chairman and chief executive officer, told a news conference. He said the goal is to allow blacks to become homeowners "without discrimination, without exclusion and without needless barriers and burdens."
Fannie Mae has helped the NAACP generate more than $120 million of mortgage financing for its clients over the past five years and the new program should help double or triple that amount, Raines said.
Kweisi Mfume, NAACP president and chief executive officer, said the partnership is intended to help families that are "looking for a way up and a way out."
Fannie Mae is a congressionally chartered, publicly traded company that buys mortgages from original lenders such as banks.
The principal lender in the new program is BankAmerica Corp.
Raines said the changes will make conventional home mortgages more competitive with those insured by the Federal Housing Administration, part of the Department of Housing and Urban Development. Fannie Mae and Freddie Mac, another government-chartered mortgage market company, compete with the FHA.
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