Fannie Eyeing Construction Loans

Fannie Mae says it wants to work with lenders and homebuilders to bring standardization to the underwriting and servicing of construction loans and bring down costs, according to Fannie Mae president and chief executive Daniel Mudd.Fannie is developing back-office support for lenders doing acquisition, development, and construction lending, he told the National Association of Home Builders at its national convention in Orlando, Fla. He noted that Fannie Mae is already a "smaller player" in construction lending. The government-sponsored enterprise purchased 42,000 ADC loans in 2004, and it plans to do $10 billion in such lending over 10 years as part of its commitment to affordable housing. The CEO stressed that Fannie wants to bring its expertise in single-family mortgages to the ADC lending market, but not to dominate it. "We're not striving to put a big hairy King Kong footprint on the market," Mr. Mudd said. "We're striving to serve the market."