Cristen Copley didn't know a special home-buying program would ante up a few thousand dollars for her St. Louis dream house. But she's glad it did: It keeps the milk from spoiling.

Fannie Mae and Freddie Mac work with government agencies, lenders and community activist groups to offer specialized loan programs around the country. The initiatives come in all shapes and sizes, but have one underlying aim -- to revitalize communities, replenish neighborhoods and otherwise give dilapidated buildings a new lease on life.

Buying a house -- and a refrigerator
"We already had the contract on the house and were getting ready to close. Then our real estate agent happened to find out about the program," says Copley, a 27-year-old registered nurse at Washington University School of Medicine in St. Louis. "Because there was so much that needed to be done to the house, we were scraping every last penny that we had, and this way we actually were able to buy a refrigerator."

In the mortgage world, thousands of home buyers never have to stop and think about the world around them. They can pay 10 percent, or even 20 percent, down and buy a brand-new home for their 2.6 kids, never worrying about anything save for the delinquent homeowner down the street who painted the mailbox a gaudy color.

To some consumers, however, finding a place to settle down involves much more. Some want to buy homes, but can't because they don't have enough money for a down payment or have too many financial scars in their past. Others crave the sense of personal satisfaction that comes from helping out the communities around them. Regardless of the reasons, these home hunters don't fit into the conventional mortgage mold.

Special loans for special buyers
Because of the efforts of a remarkable collection of groups, however, they don't have to. Supported by Fannie Mae and Freddie Mac -- the two agencies that purchase loans from lenders, bundle them together and sell them off to Wall Street investors -- these interested parties make millions of dollars worth of mortgages available so unconventional buyers can realize their dreams like everybody else. And because the programs target everyone from firefighters in Los Angeles to people with troubled credit in New Orleans, the local lender may very well offer at least one of them.

"The standard mortgage lending process doesn't always ... satisfy the needs of different markets, different borrowers and different neighborhoods," says Mike Coffey, vice president for expanding markets at Freddie Mac. "We know that (conventional loans) don't necessarily work in all cases across the entire spectrum of borrower circumstances and there are situations or circumstances where you have to do something and take more direct intervention."

The two agencies approach targeted lending in different ways, and no two loan programs are the same.

Fannie Mae got the ball rolling a few years back by unveiling a "Trillion Dollar Commitment": its pledge to provide that amount of housing money to underserved borrowers, be they minorities, low- to moderate-income mortgage hunters or immigrants. Since 1994, the agency has designed more lenient loan programs and encouraged the use of computerized loan processing systems to reduce the risk of these mortgages. It also has established so-called Partnership Offices in many cities that hammer out loan agreements with local groups.

"We're working very, very closely with our partners in the community -- developers, counselers -- and we're working with lenders and Realtors doing training," says Clifton Berry, director of the agency's St. Louis location. "If you live in an area where there is a Fannie Mae partnership office, you know about that office, you know about that office's investment plan, you know specifically the number of investments you committed to and the number of families we're committed to help."

Loans target specific groups
Two of those commitments unveiled in Berry's region during the past couple years help illustrate where the consumer fits into the grand scheme of things. The first, offered to Copley and her husband, targeted employees of Washington University and Barnes-Jewish Hospital. It allowed the couple to buy a property in the Skinker-DeBaliviere neighborhood, about three miles from WU's medical school. They received $4,000 from the university, a grant equal to about 3 percent of their home's $125,000 purchase price.

More recently, Fannie Mae announced an alliance with the Unity Health group of hospitals and related health-care subsidiaries. The program aims to encourage Unity employees to buy homes in the neighborhood surrounding the company's Alexian Brothers Hospital. Eligible borrowers will receive up to $5,000 in purchasing assistance in the form of a forgivable loan. The employee won't have to make payments on principal or interest and won't have to pay the loan back at all if he stays in his home and continues to work for the company for five years.

"The hospital is located in a neighborhood with changing demographics. We have a neighborhood which had been predominately elderly, with an older, stable population that is really starting to transition," says Glenn Appelbaum, Alexian's senior vice president. "As the largest employer here in the neighborhood, we were viewed as the logical company to take a leadership initiative."

An employee can choose between four lenders, which will offer loans under terms spelled out by Fannie Mae. The loans, which the agency will buy after closing, feature fixed-rate payment schedules much like traditional 30-year mortgages, but have looser qualification guidelines for debt-to-income ratios, credit scores and the like.

"We're right down the street from the hospital so it would make sense that we're involved with this project," says Edwin Schmid, vice president of the local Union Planters Corp. branch. "It's kind of a win-win-win thing for everyone involved. We hope, and the goal is, to try and stabilize and improve the neighborhood, and at the same time offer financing to people who may not think they qualify."

The hospital launched its program March 1 and is just now beginning to advertise it to employees. Appelbaum hopes to get about 20 to 25 people into homes during each of the next three years through the initiative.

"What you see when you leave are some boarded-up properties, some properties in somewhat of disrepair and vacancies," he says. "But you see properties in pretty shabby condition -- older brick properties -- that with some care and some dollars put into them could be quite nice facilities."

A smorgasboard of programs available
So what options are available for borrowers who don't happen to change IV bags in southeastern St. Louis? Plenty, given the wealth of programs available today through both of the agencies.

Where you can find programs in your area The Fannie Mae Partnership Office lists the names and addresses of local agencies with which it is working Check with your state's housing finance agency Check your phone book to see if your city or county government has its own housing finance agency

Freddie Mac's Los Angeles program, for example, allows civil service workers such as firefighters and police officers the chance to buy houses without a down payment. Another pilot program lets people with bad credit purchase homes after 18 months in a Consumer Credit Counseling Service debt management plan. Others have targeted minority borrowers, with the assistance of the National Association for the Advancement of Colored People and general home buyers in southern California, Kansas City, Kan. and Orange County, Fla.

Fannie Mae runs an information line (1-800-7FANNIE) that people can call to find out about programs in their area, while Freddie Mac suggests consumers contact their state housing authority or agency. Churches, other community organizations and local lenders may have information as well.

The bottom line, at least from Copley's perspective, is that help's out there for the taking -- if you know where to look.

"We are thrilled," she says almost a year and a half after settling. "At the time that we moved in we didn't even realize what a gem we have, and we just feel so fortunate that we bought into such a wonderful neighborhood."