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November 9, 2004
Fannie Mae Expands Eligibility for Manufactured Housing Mortgages;
Lets More Borrowers Qualify for Financing with Five Percent Down Payment
WASHINGTON, Nov. 9 /PRNewswire-FirstCall/ -- More borrowers will be able
to purchase a manufactured home with a five percent down payment on a 30-year
mortgage under new eligibility standards announced today by Fannie Mae
(NYSE: FNM), the nation's largest source of financing for home mortgages. The
announcement makes the lower-cost financing available from all the lenders
with which Fannie Mae does business, expanding from an initial group of ten
pilot lenders.
The change, released today as part of Lender Announcement 04-07, allows a
95 percent loan-to-value ratio on mortgage terms up to 30 years for
manufactured homes occupied as a principal residence. These changes are part
of Fannie Mae's ongoing effort to improve lending practices in the
manufactured housing market and ensure that borrowers have opportunities for
successful, long-term homeownership under financing terms that are appropriate
for this housing type.
"We announced several measures last June to strengthen our requirements for
mortgages secured by manufactured homes. Today's changes will allow us to
further broaden the availability of financing for this affordable housing
type," said Chuck Rumfola, Fannie Mae's vice president for manufactured
housing.
The eligibility changes apply to all loans delivered to Fannie Mae on or
after December 1, 2004, for purchase money mortgages and limited cash-out
refinances. Rumfola added that this expansion builds on the commitment Fannie
Mae made in June 2003 to transform the manufactured housing market and
continue to look for opportunities to serve this market effectively, by
increasing homeownership opportunities as part of its mission to expand
affordable housing. He said Fannie Mae will continue to work with its lender
partners and other interested parties to foster the adoption of best practice
measures to help ensure that consumers purchasing a manufactured home do not
pay more for the house than it is worth.
Fannie Mae's Lender Announcement 04-07 also addressed several other topics
for sellers and servicers, including:
- prohibitions against delivering to us loans that qualify as "high cost
home mortgage loans," under Indiana's Home Loan Practices Act, in
keeping with our ongoing efforts to combat predatory lending;
- documentation requirements for Fannie Mae's quality assurance process;
- clarifying our expectations of lenders in their review of appraisal
reports;
- revision of Fannie Mae's policy in response to unacceptable property
flipping schemes, to further our efforts to help home buyers and
lenders avoid becoming victims of predatory property flipping schemes;
- revised test appraisal forms, based on feedback from a previous comment
period, that communicate our expectations for a high-quality appraisal
and strengthen the appraiser's accountability for the quality of the
appraisal;
- requirements for servicing transfers, to ensure that servicers have
procedures in place to avoid adverse effects on the borrower when a
transfer of servicing occurs; and
- guidance for lender-placed property insurance, to require that
servicers have policies that protect consumers against inappropriate
lender-placed insurance practices and to ensure that servicers
effectively communicate to borrowers the ramifications of a borrower's
failure to obtain hazard insurance coverage.
The entire announcement is available for downloading at
http://www.efanniemae.com.
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 has pledged through its "American Dream Commitment" to expand
access to homeownership for millions of first-time home buyers; help raise the
minority homeownership rate to 55 percent; 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. Since 1968,
Fannie Mae has provided $6.3 trillion of mortgage financing for 63 million
families. More information about Fannie Mae can be found on the Internet at
http://www.fanniemae.com.
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."
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