Fannie Mae says it is doing away with higher downpayment requirements for borrowers in distressed real estate markets.

The government-sponsored mortgage financier said Friday it will require downpayments of between 3 percent and 5 percent for all loans that it guarantees.

That replaces a December policy that required a higher downpayment if the loan was for a home in a market with declining real estate prices.

Washington-based Fannie says the move is part of its effort to help resuscitate the flagging mortgage market.