[Congressional Record Volume 141, Number 142 (Wednesday, September 13, 1995)]
[Senate]
[Page S13552]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         TRIBUTE TO FANNIE MAE

 Mr. SIMON. Mr. President, I recently joined Mayor Daley, 
Fannie Mae President Larry Small, and others, in announcing Fannie 
Mae's ``HouseChicago'' plan. ``HouseChicago'' is a $10 billion, 7-year 
investment plan developed by Fannie Mae's Chicago Partnership Office, 
the City of Chicago and numerous local partners.
  Fannie Mae was created by Congress as a federally-chartered, 
shareholder-owned corporation, whose mission is to make sure mortgage 
funds are readily available in every State of the Nation. I am proud to 
say Fannie Mae has done a tremendous job at fulfilling that mission, 
and I want to bring to the attention of my colleagues the following 
editorial by the Chicago Tribune regarding Fannie Mae's investment in 
the city of Chicago.

              [From the Chicago Tribune, August 26, 1995]

                       Fannie Mae's Home Cookin'

       It's hard to overstate the importance of home ownership to 
     the success of a neighborhood.
       Besides being a ticket to the middle-class, ownership gives 
     people a larger stake in their communities. It makes them 
     less tolerant of vandalism or drug-dealing and more likely to 
     get involved in a block club or the PTA.
       But as nearly every homeowner is reminded once a month, 
     it's the mortgage-holder that really owns the house. It's the 
     lender or, more often, the financial house that buys the 
     mortgage from the lender whose investment is most at risk. 
     That's why the note-holder gets first claim on the property 
     should the purchaser fail to make payments.
       And that's why lenders have strict standards about whom 
     they will lend to and under what circumstances. But as 
     lenders increasingly sell their mortgages on the so-called 
     ``secondary'' market, it's the standards of the huge mortgage 
     purchasing corporation that become key.
       In that regard, recent initiatives by the Federal National 
     Mortgage Association (Fannie Mae), the nation's largest 
     repurchaser of home mortgages, deserve to be recognized and 
     applauded.
       Not to be confused with the local confectioner, Fannie Mae 
     is a federally chartered, publicly traded corporation whose 
     mission is to encourage private investment in residential 
     mortgages. It recently struck a deal with the city to modify 
     its underwriting standards in certain disadvantaged 
     neighborhoods.
       Participating lenders can now offer extra-low (3 percent) 
     down payment terms to families earning up to 20 percent above 
     the area median income of $51,300--if the house they are 
     buying is located within the city's empowerment zone or 
     certain other areas targeted by City Hall for redevelopment.
       Some might call this an attempt at gentrification, but it 
     means that middle-income families--and the stability they 
     bring--will be lured into neighborhoods they might otherwise 
     spurn as too risky.
       Other Fannie Mae changes will make it easier for buyers of 
     small apartment buildings to get conventional mortgages, as 
     well as buyers participating in the city's New Homes For 
     Chicago Program and the purchase-rehabilitation program run 
     by a group called Neighborhood Housing Services of Chicago 
     (NHS).
       The bottom-line in Fannie Mae's ``House Chicago'' program 
     will be $10 billion in private loans pumped into 
     neighborhoods that might otherwise have to rely on federal 
     mortgage insurance . . . with all the abuses those programs 
     often bring.
       It's not the candy company, but Fannie Mae is giving new 
     meaning to ``Sweet Home Chicago.''
     

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