Fannie Mae’s New Mortgage-Scoring System Aims to Lift MBS Demand

Fannie Mae is selling agency mortgage backed securities designed to appeal to socially minded investors, as the mortgage giant looks to draw more buyers into the market to help fill a void left by the Federal Reserve stopping purchases.

Since March, the government-sponsored enterprise has been selling agency MBS that are scored according to a set of revamped criteria that gives extra weight to mortgages with certain characteristics, such as whether they’re used for affordable rental housing or are to borrowers in rural areas with high poverty levels.

The goal is to give investors who buy MBS more visibility into ...