Fannie Mae, the largest mortgage finance company, will end its practice of requiring larger down payments in areas where home prices are falling.

The company will begin requiring down payments of 3 percent or 5 percent for single-family primary residences, changing rules it had set in December.

As another part of our 'Keys to RecoveryTM' initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions, said Marianne Sullivan, the senior vice president of single-family credit policy and risk management.

The move from the finance company comes as pressure builds for companies and government to do more about easing the housing crisis, which has seen home values plummet.

The new policy will take effect on June 1. Loans will be processed through the company's automated underwriting system.

We are able to adopt this new, national down payment requirement, even in markets where home prices are declining, because our new automated underwriting risk assessment model DU Version 7.0 will limit risk layering and assess each loan more precisely, Sullivan added.

Shares of Fannie Mae fell 39 cents, or 1.29 percent to $29.84 on the New York Stock Exchange.