Fannie Mae unveiled a program that it said would increase home lending in minority and lower-income neighborhoods.
Under the plan, lenders will offer mortgages with low down payments to homebuyers in qualifying neighborhoods and then sell the loans to the agency, formally the Federal National Mortgage Association.
The plan, called FannieNeighbors, marks the first time the agency has focused on neighborhoods in a nationwide affordable-housing initiative.
Previous programs have focused more on borrowers' incomes than on neighborhood characteristics.
Broad Range of Incomes
For a neighborhood to qualify, 50% of its population must be minority or its median family income must be no more than 80% of the surrounding area's.
However, Fannie will allow homebuyers with a broad range of income levels to be eligible for the plan, to encourage economic diversity in the neighborhoods.
Borrowers who earn up to 140% of the area's median income may be eligible for the loans, which feature down payments of as little as 5% and flexible qualifying criteria.
