The pilot program is called "Affordable Advantage," and it has now been adopted by four states as of Sept. 10, 2010. These are Idaho, Massachusetts, Minnesota and Wisconsin. Other states, such as California, Colorado and Pennsylvania have similar state programs. The deal includes a program to help homebuyers if they become unemployed, lowered fees and there is no requirement that the homebuyer purchase mortgage insurance.
“[The program] was created to support state HFAs and their efforts to provide qualified first-time homebuyers with financing in the wake of the housing and economic downturn,” Janis Smith, a Fannie Mae spokesperson, says. “HFAs are nationally regarded leaders in affordable housing finance and their business is prudent, sustainable business. HFAs work closely with their borrowers to ensure they’re well prepared for homeownership. As a result, the loans delivered by HFAs have very low delinquency rates. In addition, HFAs work with first-time homebuyers who need and are qualified for affordable housing — a segment that has seen increased demand with the downturn in the housing market.”
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