While the 30/30 goals released by HUD Oct. 12 will force Fannie Mae and Freddie Mac to increase their low- to moderate-income and central city business, lenders had differing opinions of how much it will do for their affordable housing business.

The Mortgage Marketplace asked three lenders--in a small mortgage banker concentrating on central city business, a medium-sized institution focusing on rural area lending and an enormous lender offering programs in virtually every region--how the more aggressive GSE affordable housing programs might help their businesses.

Susan E. Haid

Senior Vice President American Mortgage Corp. of the South Merritt Island, Fla. Assets: $1.3 million

Being near Cape Canaveral and Patrick Air Force Base gives American Mortgage a strong Department of Veterans Affairs and Federal Housing Administration lending base.

American Mortgage expects to do $50 million annually in loan originations from one branch office and would like to deal more with Fannie and Freddie. It only recently began selling a small portion of its loans to the GSEs. but, like many other lenders, would like to do more.

"We're selling about 10% to 15% of our loans to the secondary market and a majority of our originations are going to FHA and VA. probably $36 million a year," said Susan Haid. "But we'd like to do more, and one way that can happen is if we could see a little more latitude in underwriting guidelines--things like income-to-debt ratios, and in judging potential homeowner credit histories.

"I know they've tried to relax some guidelines, but lower down payment rules might help, too. We know we can probably do more."

Donna Miller

Loan Production Coordinator BancFirst Corp. Oklahoma City, Okla. Assets: $750 million

Although it doesn't participate in Fannie Mae and Freddie Mac affordable housing programs, BancFirst said it hasn't ruled it out.

With 17 branches serving small towns throughout Oklahoma, it does most of its business in FHA and VA loans and sells them to mortgage industry giants like Fleet and Norwest.

With about $13 million in loan originations at an average loan size of about $60,000 so far this year, BancFirst said a majority of those originations were done in government- and state-sponsored affordable housing programs.

Although it said it would like to work with Fannie and Freddie, it believes some of their affordable housing initiatives still need some tinkering.

"If they really want to help," said Donna Miller, "they could put together a program where the mortgage insurance companies underwrite insurance guidelines that are in line with the affordable housing programs they're underwriting."

Miller explained that the Fannie and Freddie require purchased mortgage insurance as an underwriting condition, but that insurance company guidelines lack sufficient flexibility to allow for high-ratio loans, a common loan for BancFirst's many rural area customers. "If they won't do those high-ratio type loans, then it won't help us," Miller said.

Jerry Baker

Managing Director Countrywide Funding Corp. Pasadena, Calif. Assets: $ 4.9 billion

Countrywide Funding, one of the largest mortgage lenders in the nation, estimates its total mortgage origination business at $4 billion-plus a month.

Of that amount, it directs as much as $100 million a month toward affordable housing. The California giant boldly anticipates expanding that figure to $250 million a month by the first of the year.

How does it plan to do it? Through its own affordable housing initiatives and with a strong assist from Fannie Mae and, it expects soon, Freddie Mac programs.

"Fannie Mae's programs are very compatible for us and our affordable housing pipeline continues to grow on a monthly basts," said Jerry Baker, who explained that those massive numbers were turned in without the use of any Freddie Mac programs. "The 3/2 program, neighborhood investment program and Fannie-Maps central city program have all been helpful."

Countrywide is fond of Fannie affordable housing programs. Business is on its way up even without new, more intensive HUD goals. But with the expected tough new internal goals set by the company. Baker said that Countrywide would look to embrace some Freddie Mac programs as well.

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