At Fannie and Freddie, it’s 2006, Jay Cutler doesn’t stink yet, and you can buy a house for no money down!

The Fannie/Freddie 2006 New Year’s Eve celebration kicked off at 7 PM last night at an enormous French country manor home (complete with nanny suite, library, and solarium) in the tony Longwood section of Bethesda, Maryland, which was purchased just last week for $2.3 million by a 26-year-old administrative assistant at Freddie who makes $38,000 a year, is single, has a FICO score of 530 and no other source of income.

Ever since the beginning of December, when Fannie Mae (ticker FNMA) and Freddie Mac (ticker FMCC) offered head-scratching details about their new programs to back mortgages with down payments as low as 3%, it’s been clear that the two government-sponsored mortgage giants had somehow time-traveled to the end of 2005, a time considered by many the peak of the housing bubble.  Said Palmer Aldritch, a professor of physics at the Philip K. Dick Space-Time Continuum Institute at Pontiac University, whom many academics regard as the nation’s leading authority on time travel:

I don’t know how they did it, but they’ve clearly stumbled upon the secret to time travel.  They appear to be in what’s called a time-slip.  They’re convinced it’s 2006, yet they’re still interacting with us.  They’re delusional.  There’s really no other explanation.  I mean, how can you otherwise explain why they would agree to something as stupid as buying mortgages that only have 3% down as well as relaxing requirements that lenders buy back fraudulent mortgages they sell to Fannie and Freddie?

About the new policy, Mel “No Money Down” Watt, who knows as much about real estate as Miley Cyrus knows about quantum theory but is nonetheless head of the Federal Housing Finance Agency (FHFA), which regulates Fannie and Freddie, had this to say:

To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans.

Asked for to comment on Watt’s statement, Professor Aldritch said, “Wow, that’s reassuring.  Their underwriting standards worked so well during the housing bubble.  Does automated mean that no human government employees are involved?  That would actually be a good thing.  As far as counseling, the best bet is to counsel these people to put more money down or wait until they can or, god forbid, buy a cheaper home.”

Meanwhile just before midnight at the Fannie/Freddie 2006 blow-out, with 50 Cent’s “Disco Inferno” booming in the background, winners of the “What Bubble? Real Estate Raffle” were announced.  First prize went to Crystal Toot, 28, a recent graduate of the Ennet House Drug & Alcohol Recovery House (sic) in Boston, who joined the Fannie Mae mailroom in November.  Ms Toot (FICO score 470) will take “ownership” of a gorgeous five-bedroom Dutch Colonial in affluent McLean, Virginia, a 25-minute drive to Fannie’s DC headquarters.  As part of her prize, Fannie has arranged an interest-only, adjustable-rate mortgage for her.

Second prize was a set of steak knives.