Fleet, Fannie Mae and NeighborWorks Launch Program to Revitalize Neighborhoods

Business Wire, Dec 15, 1998

BOSTON--(BUSINESS WIRE)--Dec. 15, 1998--Fleet Financial Group and its subsidiary, Fleet Mortgage today launched a $65 million purchase rehabilitation program designed to revitalize the housing stock and to provide housing opportunities for low-and moderate-income home buyers. The program, HouseWorks(SM), is a joint initiative with Fannie Mae (FNM/NYSE), the nation's largest source of home mortgage funds, and NeighborWorks(R) Organizations.

HouseWorks encourages home ownership in urban and rural areas by assisting the buyer with funds to purchase and rehabilitate a property. The program is available to low- and moderate-income home buyers who complete extensive home buyer counseling programs offered by participating NeighborWorks Organizations.

"By forming a critical alliance with Fannie Mae and the NeighborWorks network to offer a flexible rehabilitation loan option, we believe we are able to fulfill a need for the low-and moderate-income homebuyer," said Agnes Bundy Scanlan, managing director of community development for Fleet Financial Group. "By including rehabilitation costs in the initial loan and providing assistance with closing costs, we're also promoting neighborhood revitalization."

Local participating NeighborWorks Organizations, which are affiliated with the Neighborhood Reinvestment Corporation, will provide the counseling and rehabilitation monitoring. The NeighborWorks Organizations offer a comprehensive home buyer counseling program, which educates potential homeowners on the mortgage process and their responsibilities as a homeowner. The organizations also provide the borrower with rehabilitation assistance, which entails preparing the bids, selecting and monitoring the contractor, reviewing the property inspections, and in some cases, originating and assisting borrowers in preparing for the loan application process.

"The homebuyer can count on NeighborWorks organizations to successfully see them through the home buying maze," said George Knight, executive director of Neighborhood Reinvestment Corporation. "With partners like Fleet and Fannie Mae, resources are committed to assist eligible homebuyers."

Under the HouseWorks program, eligible borrowers may obtain up to 95 percent financing for single- and two-family homes, and up to 90 percent for three-family homes. With the specially designed NeighborWorks program, borrowers can purchase a single family home with a maximum sales price of $80,000 with a downpayment of only $1,000. The remaining downpayment and closing costs can come from the participating NeighborWorks Organization in the form of an unsecured loan. The borrower may also obtain an unsecured loan from Fleet Bank to cover closing costs. Fannie Mae will allow up to 50 percent of the appraised value to be financed for the cost of the rehabilitation. Commonwealth Mortgage Assurance Company (CMAC) will provide mortgage insurance.

"With our aging housing stock and the price of new construction beyond the reach of many homeowners who need to expand or enhance their current living space, there is an increasing need for mortgages that provide affordable home improvement financing," said Zach Oppenheimer, senior vice president of Fannie Mae's Northeastern regional office. "We believe this partnership will have a tremendous impact on the revitalization of neighborhoods throughout the Northeast."

Fleet Mortgage Group, headquartered in Columbia, SC, is a subsidiary of Fleet Financial Group. A leading originator of residential mortgage loans, the company provides mortgages through retail offices in the Northeast, a national network of 1,000 correspondents, wholesale brokers nationwide, and its National Telesales Center. As the fifth largest mortgage originator and servicer in the nation, Fleet Mortgage's $118 billion servicing portfolio comprises 1.3 million customers.

Fleet Financial Group, headquartered in Boston and listed on the New York Stock Exchange (NYSE:FLT), is a diversified financial services company with $100 billion in assets and $74 billion in assets under management. Fleet is the nation's sixth largest commercial lender and New England's leading small business lender. Fleet's products and services include consumer banking, government banking, mortgage banking, private banking, corporate finance, commercial real estate lending, credit cards, insurance services, cash management, capital markets, equipment leasing and asset-based lending. Fleet also provides a wide array of investment management services for both individuals and institutional clients and operates the nation's third largest discount brokerage firm through its Quick & Reilly, Inc. subsidiary. With nearly 1,200 branches and over 2,400 ATMs, Fleet also provides 24-hour telephone banking as well as on-line banking services through the internet and through its PC Banking software for individuals and businesses.

Fannie Mae is a congressionally chartered, shareholder-owned company and the nation's largest source of funds for home mortgages. It has committed to provide $1 trillion in targeted lending for 10 million homes by the end of the decade. The targeted lending will serve low- and moderate-income families, minorities, new immigrants, residents of central cities and other underserved areas, and people who have special housing needs. Over the past 30 years, Fannie Mae has provided $2.5 trillion in mortgage financing for 32 million families. More information about Fannie Mae can be found on the internet at http://www.fanniemae.com.