WASHINGTON - The Federal National Mortgage Association is introducing a program designed to help state and local housing agencies take better advantage of declining interest rates and minimize negative arbitrage when they issue mortgage revenue bonds.

Under the program, dubbed MRB Express, the agencies would actually originate mortgage loans before issuing bonds. That would be accomplished by negotiating an interest rate on the bonds with Fannie Mae several months in advance of the bond sale. Once issued, the bonds would be privately placed with Fannie Mae.

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