This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Time Right for FNM's 'Smart Commute' Plan

Fannie Mae came out with a mortgage program several years ago called Smart Commute that rewarded people for buying homes near public transportation by granting them additional buying power.

It wasn't well-promoted and pretty quickly joined the land of the living dead --still ongoing but not actively marketed -- where it resides even today.

But Fannie Mae (FNM) was simply a few years ahead of itself, I think. If the executives over there had any sense, they would pull the Smart Commute mortgage out of their files, dust it off and promote the heck out of it.

When the lending concern introduced this mortgage in 2003, credit was cheap, as were gasoline prices, but housing prices were high and rising higher. This made exurban homes, with their double-high ceilings, multiple bathrooms and long drives to job centers the best option for many homebuying families.

In fact, Patrick Hare wrote an article for Sierra magazine three years ago explaining how mortgage-industry practices actually have encouraged borrowers to choose sprawling suburbs over compact, environmentally efficient cities. City dwellers and suburbanites both use about 55% of their income on housing and transportation, he explains, but in different proportions.

Suburbanites, who have car payments, insurance and gas tanks to fill, spend about 30% of their income on housing and 25% on transportation. City folks have bigger housing bills that eat up 45% of their budget, but if they use public transit they spend only 10% of their earnings getting around. This is how they can afford their more expensive digs.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HIFS $127.99 0.00%
NYT $12.82 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs