Fannie Mae expanded its mortgage portfolio in June, while the rate of late payments on loans it guarantees fell in May to the lowest level this year, the largest U.S. home loan purchaser said on Friday.

The serious delinquency rate has steadily improved but remains elevated, with 9.5 percent U.S. unemployment and wage cuts making timely loan payments a struggle for many borrowers.

At 5.15 percent in May, the latest figures available, the single-family delinquency rate fell from 5.30 percent in April and a high of 5.59 percent in February. In May 2009, however, the rate was 3.68 percent.

The serious delinquency rate on multi-family loans dipped to 0.76 percent in May from 0.78 percent in April after peaking at 0.79 percent in March. A year ago in May the rate was 0.50 percent.

Fannie Mae, like No. 2 U.S. home funding company Freddie Mac, has repurchased severely troubled single-family loans in bulk from its securities trusts this year, aiming to ease the drain on capital.

Fannie Mae Chief Executive Michael Williams on Wednesday said more stringent lending standards are helping the company build its strongest books of business in the last decade.

The company, through spokesman Brian Faith, declined further comment on the portfolio summary Friday.

Fannie Mae on Friday said its June total book of business, gross mortgage portfolio and other measures include about $19 billion of these repurchased loans that will not be reflected as liquidated from its mortgage-backed securities until July.

The total book of business fell 10.9 percent to $3.219 trillion, which pulled it down 1.3 percent year to date.

The gross mortgage portfolio rose 6.3 percent in June, or about $4.1 billion, to $817.8 billion, up 12.1 percent year to date. Taking into account net outstanding commitments to sell $5.3 billion, the portfolio was $812.5 billion at the end of June.

Fannie Mae said its total debt outstanding increased in June by nearly $21 billion to $860.8 billion.

Last Friday, Freddie Mac said it shrank its mortgage investment portfolio in June to $739.5 billion while delinquencies stayed elevated but fell.

(Reporting by Lynn Adler; Editing by Theodore d'Afflisio)