Celebrating All-Time Record Homeownership Rate of 66.8 Percent, Fannie Mae's Johnson Challenges Mortgage Industry to Strive for 68 Percent Homeownership by End of Decade

Business Wire, Oct 23, 1998

WASHINGTON--(BUSINESS WIRE)--Oct. 23, 1998--Fannie Mae Chairman and CEO James A. Johnson Friday celebrated the rise in the nation's homeownership rate to 66.8 percent in the third quarter of 1998, an all-time high.

"The strategies Fannie Mae has had in place throughout the 1990s are having an important impact," Johnson said.

"Now is the time for Fannie Mae and the mortgage finance industry to commit to the goal of raising the nation's homeownership rate to 68 percent by the end of the decade. Because of the unprecedented volumes of mortgage originations in 1998, and predictions for a strong year in 1999, this goal is achievable."

In the 1990s, Fannie Mae (FNM/NYSE), the nation's largest source of home mortgage funds, has provided nearly $2 trillion in housing finance to help 22 million families, including more than 12 million families who purchased homes.

In 1994, the company announced a Trillion Dollar Commitment, through which it would provide $1 trillion in targeted housing finance to help ten million families buy homes. Fannie Mae's commitment was targeted to low- and moderate-income families, minorities, new immigrants, residents of central cities and underserved areas, and people with special housing needs.

Since then, Fannie Mae has provided more than $615 billion in financing through the Trillion Dollar Commitment to help 7.5 million families buy homes.

Said Johnson, "More American families own homes today than at any time in history. A rising rate of homeownership brings many benefits to families and neighborhoods, including less crime, better schools, and higher levels of community participation and personal satisfaction. I'm proud that Fannie Mae has made such an important contribution to this important national priority.

"I predicted in 1997 that the homeownership rate would reach 67.5 percent by the year 2000. We are on pace to exceed that goal. Now is the time for the mortgage finance industry to set its sights on a goal of a 68 percent homeownership rate by the end of the year 2000."

"The fact that the homeownership rate rose across all demographic groups and geographic areas is especially significant," Johnson said.

"While homeownership rates for African-Americans and Hispanics are still too low, the mortgage finance industry has made great advances in reaching out to minority home buyers and bringing them into a housing finance system that for far too long failed to serve their needs."

Fannie Mae has provided more than $117 billion in housing finance to minority families since 1994 alone. In 1997, 17.4 percent of Fannie Mae's business financed homes for minority Americans. Fannie Mae provides more housing finance to minorities than any other institution in the United States.

In the third quarter of 1998, Fannie Mae provided $133 billion in housing finance to American home buyers. "Even in a time of unexpected volatility and illiquidity in American credit markets, consumers in the United States continue to have a stable supply of mortgage money," Johnson said.

"Fannie Mae was created to make sure mortgage money is available in all markets, in all times, under all economic conditions. Because of what we do, there will be no credit crunch for housing. In fact, 1998 will be the greatest year for mortgage originations in history.

"And given the very clear link between liquidity in the mortgage markets and opportunities for homeownership, we need to make sure that we preserve Fannie Mae's pivotal role in making mortgage credit available and affordable for home buyers and housing."

Fannie Mae is a federally chartered, shareholder-owned company and the nation's largest source of funds for home mortgages. It has committed to provide $1 trillion in targeted lending for 10 million homes by the end of the decade.

The targeted lending will serve low- and moderate-income families, minorities, new immigrants, residents of central cities and other underserved areas, and people who have special housing needs. Over the past 30 years, Fannie Mae has provided $2.5 trillion in mortgage financing for 32 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Style Usage: Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae," and the company's stock is now listed on the NYSE as "Fannie Mae." In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."