Fannie Mae Planning to Finance Homes for 30,000 L.A. Families
The Federal National Mortgage Assn. and the City of Los Angeles on Friday unveiled plans designed to make it easier for low- and moderate-income L.A. families to buy homes.
The program, called House Los Angeles, targets city households with annual incomes at or below $54,200. Among other things, House Los Angeles will provide mortgages that require as little as 3% down and have more flexible credit requirements under some new programs.
As part of that effort, the government-sponsored mortgage corporation, nicknamed Fannie Mae, will open a local office in the next 60 days and launch a bilingual advertising campaign.
On an annual basis, the House Los Angeles program represents roughly a 13% increase over the new mortgages Fannie Mae financed in Los Angeles during most of 1994, said Ann Marie Wheelock, a Fannie Mae official in Pasadena who works with cities and nonprofit housing groups. Fannie Mae now expects to finance about $3.3 billion in mortgages for more than 30,000 families over the five-year life of the program.
“There will be a tremendous opportunity for new and different products as well as an increase in the investment we are making here,” Wheelock said.
“The fact that $3.3 billion will now be available to first-time homeowners in our city is the kind of news that we can celebrate,” said Mayor Richard Riordan at a news conference on the steps of City Hall.
This is not the first time Fannie Mae, the nation’s largest provider of mortgage financing, has provided funding for low-income home loans in the Los Angeles area. But James A. Johnson, Fannie Mae’s chairman, called it the largest program of its kind.
“We believe in Southern California, housing has always been a very important family priority,” he said. “And if we can simply get better products and better outreach and better dialogue going with people, . . . we can boost the level of home ownership in this area.”
The Los Angeles program is part of a $1-trillion national program announced by Fannie Mae last March. It is also part of a trend in the mortgage lending industry to broaden its base of customers as the market has grown soft with rising interest rates, said Earl Peattie, president of Mortgage News Co., which tracks the industry.
Also, Fannie Mae will commit $300 million to finance new multifamily housing over the next five years. Fannie Mae will also invest $1 million in Family Savings Bank, a black-owned institution that serves South Central Los Angeles.
Johnson was uncertain how many additional people will benefit under the program who would not have been able to win loans on their own.
But Gary W. Squier, general manager of the city’s housing department, said it will help. “This program is going to start working at the edges of communities that haven’t had the same access to credit as other communities have for a variety of reasons,” he said.
