Fannie Mae meets lending goal

     By Nick Haley
     Real Estate Writer
      Low unemployment, liberalized lending rules and localized lending products have helped more than 61,000 Nevada residents purchase a home with funding through secondary lender Fannie Mae, according to Charlene Peterson, director of the Nevada Partnership Office for the nationwide lending giant.
      Fannie Mae recently announced that its HouseNevada initiative, a five-year, $5 billion plan to provide affordable housing opportunities for more than 50,000 families, has exceeded its goal in only three years. More than 61,000 homes, including about 5,000 low-income units, have been purchased by Nevada residents through the initiative since it began in April 1996.
      The secondary lender released the report at its Nevada Housing Symposium, held on the campus of the University of Nevada, Las Vegas. The forum featured guest speakers Sen. Richard Bryan, D.-Nev., state Treasurer Brian Krolicki and Fannie Mae chief economist David Berson. Fannie Mae also used the event to announce a new $7 billion investment plan to fund an additional 80,000 affordable homes over the next five years.
      Bryan said homeownership is important for families and for communities and cited his own family's first home-buying experience.
      "It gave us a stake in the community and a source of pride," Bryan said.
      The senator praised the lending industry for expanding home-buying opportunities, but warned that despite a healthy economy, many families still cannot afford to purchase a home.
      "The solution to the affordable housing problem is multifaceted," he said.
      Bryan cited several new approaches to expanding affordable housing, such as a lease-to-purchase initiative started by Lewis Homes, tax credits offered to builders of low-income housing and consumer education.
      "None of these provides the total answer. I'm sure some combination of these may contribute to the solution," he said. "We need additional creative approaches, involving the private sector, involving the community ... to address the need for affordable housing."
      Peterson said the combination of a stable, strong economy and new lending rules has increased homeownership dramatically over the past few years.
      "Fannie Mae has been focused on increasing overall homeownership, not just in Nevada but across the nation," Peterson said. "With that initiative came a whole lot of new (home-buying) products.
      "It used to be to buy a house you had to have 10 percent down. That's not the case any more. You can have 3 percent down now. And that 3 percent can come from a greater number of sources than before."
      Although unheard of years ago, loans with a 3 percent down payment have become common in the '90s. When they were first offered, the risk associated with such loans was unknown.
      "Much of this housing initiative has been a learning process for (Fannie Mae)," Peterson said. "What we have learned is that (3 percent-down loans) are not necessarily higher-risk products. Because it has worked out so well, it has helped us to exceed our lending goals ahead of time."
      Fannie Mae has supplemented its lending commitment, which nationwide has exceeded $1 trillion, by developing lending programs exclusively for particular markets.
      "Every community, including Southern Nevada, has unique needs," Peterson said. "That's another thing we've been learning about since we opened our office in Las Vegas. We understand the local economy, particularly the service economy, much more. We understand that this is a viable, stable industry."
      Peterson cited several programs the lender has developed for Southern Nevada, including:
      --Lewis Homes' lease-to-purchase program, established in summer 1998. Residents of the developer's apartment complexes can receive credit toward the down payment on a home built by the developer. Lewis, which merged late last year with Kaufman and Broad Home Corp., is the first to offer such a program with backing by Fannie Mae. It is available only in Los Angeles and Las Vegas.
      --An employer-assisted housing initiative, established by local builder J.D. Construction. Working with Clark County and Fannie Mae, the developer provides assistance with down payments and closing costs for its employees.
      --A relocation program, in cooperation with the city of North Las Vegas, to help residents of Windsor Park. Homes in the 30-year-old development have suffered severe structural problems stemming from soil subsidence. The city has sought a means to relocate the residents for about 10 years, but has lacked the necessary funds. Fannie Mae purchased a tax-exempt bond from North Las Vegas, which allows the city immediate access to $4 million.
      "When a city is limited in its means, they have to find a way to leverage what they have," Peterson said.
      The partnership also petitioned for exemptions to regulations from the U.S. Department of Housing and Urban Development, which otherwise would have restricted the city's bond options.
      "I believe we saved the city a lot of money. They issued a $4 million tax-exempt bond at 4.3 percent. We also did the work so they didn't have to hire a financial adviser," she said.
      Peterson said the first-of-its-kind arrangement could become a model for municipalities nationwide.
      "We will continue to provide housing opportunities for residents in situations like these," Peterson said.