Bank of New York has begun using an updated version of Fannie Mae's underwriting software that automates co-op lending, which makes up 28% of the New York City mortgage market.

The agency began testing the software Nov. 16 in a pilot with 20 lenders in five regions, but Bank of New York is the only one using the co-op option. The technology is meant to streamline what can be a cumbersome process and reduce the cash down payment required to as little as 5%.

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