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Fannie Mae scraps higher downpayment rule

Company will not force borrowers to put up more money in weak markets

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updated 10:35 a.m. ET May 16, 2008

WASHINGTON - Fannie Mae says it is doing away with higher minimum downpayment requirements for borrowers in distressed real estate markets.

The government-sponsored mortgage financier said Friday it will require minimum downpayments of between 3 percent and 5 percent for all loans that it guarantees.

That replaces a December policy that required a higher minimum if the loan was for a home in a market with declining real estate prices.

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Washington-based Fannie says the move is part of its effort to help resuscitate the flagging mortgage market.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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