The Nation - News from Feb. 9, 1989

The Federal National Mortgage Assn. and an organization of local housing officials announced a pilot program selling foreclosed homes to local agencies for use by low- and moderate-income families. The first sales will be in four Texas cities and in Denver. Officials said they hope to expand the program throughout the country. The federally chartered mortgage corporation known as Fannie Mae agreed to make all its inventory of foreclosed homes in those cities available for purchase by local housing or community development agencies. The homes will be sold at a discount of 10% to 15% from market value, said Patrick O’Neill, Fannie Mae senior vice president for real estate sales. The discount reflects the savings to Fannie Mae in reduced holding costs and the absence of real estate brokerage commissions and other fees it must pay to sell the houses on the open market, he said.