WASHINGTON -- Fannie Mae, bowing to lenders and a leading member of Congress, has agreed to buy some refinanced mortgages with as little as 5% borrower equity. It previously required 10% equity.

The policy shift, announced Friday by agency chairman James Johnson, is expected to spur refinancings in the Northeast and California, where falling house prices have blocked many homeowners from refinancing.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.