When FHA made changes to its 203(k) loan program, Fannie Mae was apparently watching closely and the GSE took steps to ensure its guidelines for rehabilitation loans would complement HUD's initiatives.

Fannie said construction-related costs such as property inspection fees, appraisal fees, the cost of title insurance, and fees for construction draws can be financed in the mortgage amount. Fannie predicted the changes would make the initiatives - which are part of Fannie's HomeStyle rural lending program - more attractive to lenders and would encourage participation in HUD's 203(k) Rehabilitation Mortgage Insurance Program.

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