01440pab a2200157 454500008004000000100002100040245005800061260000900119300001300128362000900141520100700150650003801157650002201195700001901217773004601236180718b2001   xxu||||| |||| 00| 0 eng d  aBlaackman, Allen  aLocation-efficient mortgages: is the rationale sound?  c2001  ap.633-49  aFall  aLocation efficient mortgage (LEM) programs are an increasingly popular approach to combating urban sprawl.  LEMs allow families who want to live in densely populated, transit-rich communities to obtain a larger mortgage with a smaller down payment than traditional underwriting guidelines allow.  LEMs are premised on the proposition that homeowners in such "location-efficient" areas can safely be allowed to breach underwriting guidelines designed to prevent mortgage default because they have lower than average auatomobile-related transportation expenses and more income available for mortgage payments.  This paper employs records of more than 8000 FHA-insured mortgages matched with data on various measures of location efficiency to test this proposition.  The results suggest that it does not hold and that LEMs - like other low-down-payment mortgage programs - will raise mortgage default rates.  This cost must be weighed against any potential anti-sprawl benefits LEMs may have. - Reproduced  aUrban development - United States  aUrban development  aKrupnick, Alan  aJournal of Policy Analysis and Management