NEW YORK - Chemical Bank announced it will make home loans with a 3% down payment under a Fannie Mae program. Fannie launched the program in 1994, and earlier this year cleared the way for Chemical to make such loans in the New York market, according to Wesley A. Wainwright, senior vice president in charge of Chemical's affordable mortgage unit.

But before introducing the product, chemical wanted to be sure that the mandated pre- and post-purchase borrower counseling was up to the mark, Mr. Wainright said. The leading mortgage insurance companies will counsel borrowers for Chemical.

Mr. Wainright said it was tough to predict how much Chemical would do under the new program, given tight business conditions and more restrictive underwriting than for affordable-housing loans with a 5% down payment.

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