Fannie Mae Program Helps First-Time Home Buyers

Some first-time Orange County home buyers with excellent credit but little cash for down payments are getting help from Fannie Mae.

In a test program, the federally sponsored home mortgage company will provide $30 million in financing to such buyers. The program, dubbed Flexible 97, is available in selected areas nationwide, including the Riverside-San Bernardino area, where there’s another $50 million available.

The 15- and 30-year fixed-rate loans require down payments of as little as 3%--and buyers can take out personal bank loans or accept gifts from relatives to cover the down payments.

Participating lenders include Bank of America, California Federal Bank, Countrywide Home Loans, CTX Mortgage, Glendale Federal Bank, Guild Mortgage, Mical Mortgage, Mission Hills Mortgage, Mortgage Capital Resource Corp., Norwest Mortgage and WMC Mortgage.

Fannie Mae--the Federal National Mortgage Assn.--buys the mortgages from the lenders, getting them off the hook in case of default. Officials said the interest rates on the loans are no higher than on other conventional mortgages. But be warned--the credit standards are high. And the loan limit is $227,150.

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E. Scott Reckard covers real estate for The Times. He can be reached at (714) 966-7407 and at scott.reckard@latimes.com