Fannie Mae, which in the past seven years has provided $1 trillion in mortgage financing to underserved markets such as minorities and rural homebuyers, is now pledging to double that to $2 trillion over the next decade to reach borrowers who did not benefit from the previous initiative.

Fannie Mae chairman Franklin Raines said black homebuyers are a major target of the expansion, adding that over the next decade $400 billion in new loans would be made available to blacks.

The increased commitment to minority lending comes two weeks after Fannie Mae and Freddie Mac came under fire from a proposal by the Department of Housing and Urban Development that said they were not buying enough loans made to blacks. Various coalitions of mortgage lenders also attacked Fannie and Freddie for moving into the subprime loan market.

Mr. Raines argued that Fannie Mae has already made progress on minority lending, pointing out that in 1998, 17.5% of its mortgage purchases were for minority single-family homes. By comparison, 16.9% of loans made in 1998 were to minorities.

Fannie Mae's proposal also identified single-mother families and other groups as targets for the new money, identifying the need to close the "divide between the 'haves' and the 'haven't yets' as a matter of national urgency," said Mr. Raines.

He said Fannie wants to get affordable loans to more people currently in the subprime market. Subprime loans are made to borrowers with riskier credit histories and carry higher interest rates.

Ultimately, the effort is aimed at bringing more people into the prime market who would otherwise not have been able to qualify for these lower-rate loans, through education and by working with lenders to reevaluate the subprime market. Mr. Raines said he feels half of those who now borrow in the subprime market could qualify for better loans.

"Fannie Mae has set a lot of standards in the past, and we want to work with lenders to set standards for consumer protection of people with impaired credit so that they will not be subject to predatory lending," Mr. Raines said.

He said the result would be lower costs, which he said would in turn benefit consumers.

He also said his company is prepared for the increased risk the new subprime loans would cause, referring to automated underwriting technology that will help to better assess risk.

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