United Guaranty Residential Insurance Co. is offering two reduced-insurance options for loans with low down payments.

The programs are the latest response to an initiative by Fannie Mae, which last month said it would reduce insurance requirements for low-down- payment loans to 1994 levels for borrowers approved by its automated underwriting system. It offered further reductions in coverage in exchange for a fee or higher note rate.

United Guaranty said it would add a portion of the insurance premium to the loan balance, resulting in a lower monthly premium and no increase in the interest rate. In this option, the financed part of the premium would be added to the claim payment.

In the other option, the lender would pay part of the premium, letting United Guaranty reduce the borrower's monthly premium. In return, the borrower would pay a higher interest rate.

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