The U.S. Department of Housing and Urban Development said it would allow the use of Fannie Mae's and PMI Mortgage Insurance Co.'s automated underwriting systems for FHA loans.

HUD last year gave its blessing to Freddie Mac's Loan Prospector system as a tool to approve applications for loans to be insured by the FHA program. Now, lenders may also use PMI's Aura system, which Fannie Mae will distribute nationally as part of its Desktop Underwriter system.

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