WASHINGTON - The Department of Housing and Urban Development instituted changes in its FHA program last week that will make it easier and cheaper for lenders to use the government insurance program.

The changes reflect business practices in the rest of the market and are designed to make the FHA more competitive, the agency said in an announcement.

Among the changes are the following:

*The requirement that all borrowers be interviewed face to face by lenders will be dropped. Only first-time homebuyers who put down less than 10% of the home's value must apply in person. And for those low-down- payment homebuyers who have been counseled on homeownership by an approved agency, the requirement will be dropped altogether.

*Lenders will no longer be required to have a "brick and mortar" branch office. They will have new flexibility to determine the type of office facilities and staffing levels.

*The federal housing administrator will not not rate individual underwriters at FHA lenders. Mortgage lenders will now monitor their own employees and be responsible for the loans they originate.

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MIAMI - Fannie Mae has announced that it will fund $5 billion in affordable housing for nearly 70,000 homebuyers and renters in Miami and Dade County.

The commitment is part of the agency's program to make $1 trillion in such loans by the year 2000.

In Miami over the next five years, Fannie Mae, known formally as the Federal National Mortgage Association, will make $100 million in loans a year with a 3% down payment.

The agency will also combine its 3/2 loan program with several down payment assistance programs. (Under the 3/2 program, borrowers come up with 3% of the home value as down payment and other sources contribute 2%.)

In addition, Fannie Mae said it had established new relationships with three minority- and women-owned lenders. The lenders will be mentored by larger institutions and trained to sell loans to Fannie Mae.

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WASHINGTON - Freddie Mac announced that it would purchase mortgages through the Department of Agriculture's guaranteed rural housing loan program.

The agency, formally the Federal Home Loan Mortgage Corp., will begin purchasing these loans on a negotiated basis in November.

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