[Congressional Record Volume 140, Number 35 (Thursday, March 24, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                         FANNIE MAE'S BOLD STEP

                                 ______


                   HON. MARJORIE MARGOLIES-MEZVINSKY

                            of pennsylvania

                    in the house of representatives

                        Thursday, March 24, 1994

  Ms. MARGOLIES-MEZVINSKY. Mr. Speaker, I want to applaud Fannie Mae on 
their new initiative which will serve to give millions of Americans, 
who were previously unable, the support they need to afford to buy a 
home.
  I urge my colleagues to read the following editorial from the March 
18, 1994, edition of the Philadelphia Inquirer.

            [From the Philadelphia Inquirer, Mar. 18, 1994]

                         Fannie Mae's Bold Step

       If money talks, the nation's largest home-mortgage investor 
     virtually shouted this week when it announced it was prepared 
     to make available $1 trillion to help Americans with modest 
     incomes buy homes.
       By committing twice as much for mortgages in the next seven 
     years as it has in the last seven, the Federal National 
     Mortgage Association (known as Fannie Mae) aims to provide 
     access to the classic American dream, a home of one's own, 
     for minorities, city dwellers, people with special needs and 
     new immigrants.
       In its bold attempt to remove the barriers--financial, 
     racial or otherwise--that have kept homeownership out of 
     reach of millions, the plan has the potential to transform 
     the nation in nearly the same way federal mortgages did after 
     World War II.
       Since the announcement, an almost palpable wave of hope and 
     joy has engulfed area housing experts, community leaders and 
     even lenders. We, too, are excited by the scope of the plan, 
     its commitment and, most of all, its potential for recreating 
     the urban landscape. For home ownership is key not only to 
     building strong families, but also to reviving neighborhood 
     businesses and boosting community pride.
       The Philadelphia region stands to gain plenty from this 
     initiative. Philadelphia housing chief John Kromer's most 
     recent analysis of housing needs found that while the 
     homeownership rate here is a respectable 62 percent, almost 
     10.6 percent of all housing stock is vacant, and stock is 
     even more scarce for those earning less than $30,000 a year.
       Moreover, the Fannie Mae initiative can build on the 
     success of existing programs, such as the coalition of eight 
     area banks and 23 community groups that operate the Delaware 
     Valley Mortgage Plan. Thanks to that plan, 18,000 families 
     with low and moderate incomes have bought homes in the last 
     20 years.
       This plan works largely because the banks offer flexible 
     underwriting standards that count welfare and Social Security 
     as income, and consider payment of rent and utility bills as 
     proof of credit-worthiness. But banks can't sell such loans 
     to Fannie Mae under current guidelines, a situation we think 
     Fannie Mae should change as part of the initiative.
       Such a change would automatically boost interest in 
     neighborhoods now written off by banks more inclined to 
     finance a handful of $300,000 mortgages than dozens of 
     $45,000 loans. And such neighborhood investment is sorely 
     needed to Philadelphia, where ambitious plans to spur the 
     economy are focused more on creating a glittery downtown than 
     on rebuilding the areas where most Philadelphians live.

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