Freddie Mac has taken off the gloves again in its attack on Fannie Mae's high-profile initiatives to support low-income housing.

Speaking at the senior executives conference of the Mortgage Bankers Association, Freddie's marketing chief branded as "irresponsible" Fannie's newest program, which allows low-income borrowers to take out home loans with down payments of only 3% of the purchase price.

"Ultimately, consumers and neighborhoods in underserved areas do not benefit from irresponsible lending practices that focus on short-term goals," said Stephen T. Hopkins, senior vice president and national sales director at Freddie Mac.

The 3%-down program is problematic, Mr. Hopkins said, because it requires borrowers to invest so little of their own money in their homes, and does not compensate for that flexibility by asking borrowers to meet tighter credit standards on some other fronts.

Mr. Hopkins predicted that the "easy credit" would lead to high defaults that would hurt low-income neighborhoods.

Lenders have criticized Freddie Mac for its own unwillingness to test the 3%-down loans.

A Fannie Mae senior vice president, Martin D. Levine, defended the Fannie initiative.

"We view (the program) as a critical and appropriate action," Mr. Levine said. "We see no reason to believe that this is anything other than good, positive, sound business."

Mr. Levine said the 3%-down loan program was built on Fannie Mae's experience with other low-income lending programs, and was more narrowly targeted than other low-income programs to cut back on the risk.

In a letter to the Federal Housing Administration earlier this month, Fannie Mae criticized Freddie Mac's performance in low-income lending and complained that the FHA was too lenient in setting lesser standards for Freddie Mac than for Fannie Mae.

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