WASHINGTON -- The Federal National Mortgage Association is launching a program under which it will provide credit enhancement for refundings and remarketings of tax-exempt multifamily housing bonds and 501(c)(3) bonds now being backed by banks and other private institutions.

Fannie Mae officials said the program is needed because issuers who want to do current refundings of their bonds to take advantage of low interest rates are running into a roadblock: Their current credit enhancers are dropping away and they cannot find other private backers to replace them.

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