The Federal National Mortgage Corp.'s recent announcement that it intends to buy as much as $1.0 billion of housing bonds by yearend has significant repercussions for investors, issuers, and Wall Street underwriters.

When the government-sponsored enterprise, better known as Fannie Mae, won the competitive bid on the Minnesota Housing Finance Agency's $47.5 million sale of revenue bonds last week, it raised a number of issues: most notably, how can private firms compete with a government-sponsored enterprise, and what impact will a major push from Fannie Mae have on pricing in the housing sector?

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