New Homeowners Applaud City of Oakland, Keating Housing Initiatives & Bank of America At Old Town Square Grand Opening

Business Wire, Sept 16, 1998

OAKLAND, Calif.--(BUSINESS WIRE)--Sept. 16, 1998-- Homeownership Accelerated Due to BofA's Zero-Down Mortgage Program

In a ribbon cutting ceremony today, nearly 100 new Oakland homeowners celebrated their new downtown homes at the grand opening of Old Town Square condominium project in the Old Oakland section of the City. Representatives from the City of Oakland, Keating Housing Initiatives, and Bank of America were on hand to commemorate the completion of the first phase of this award-winning project. Ten townhouses and eighty-eight condominiums, including flats with lofts, are now available for occupancy and most of the ninety-eight units have been sold.

Old Town Square is designed to fit into the historic ambiance of Old Oakland. It features Victorian style architecture, significant landscaping, underground parking, secured entrances and provides affordable housing for moderate and middle-income residents. It was the combined efforts of city government, business and banking that made such a well-designed homeownership opportunity available for this under-served market.

"Even before the current economic upswing, Oakland's Mayor and City Council members had the courage and the vision to initiate and invest in the development of market-rate housing in an area that had not experienced any major development in a long time," said City Manager Robert C. Bob. "This development will be a tremendous boost to the revitalization of Oakland's Downtown."

The City of Oakland selected Keating Housing Initiatives, a subsidiary of the Keating Building Corporation and a major developer of affordable in-fill housing in 1995 from a list of a dozen developers in a national competition to develop the project. Keating proposed a homeownership development that would induce middle-income including downtown workers to live in the downtown area.

"Cites throughout the country are only beginning to plan what Oakland has already achieved -- downtown ownership housing for people who work there," said Gerald Doherty, President of Keating Housing Initiatives, Inc.

Keating's market studies found the downtown work force would be interested in living in the area if two key conditions were met" (1) they could have the opportunity to purchase a home with a minimal downpayment at a reasonable price, and, (2) a "critical mass" of units would be developed in the area. In response, Keating originally designed a lease-purchase program with a two-year lease period and a $1,500 downpayment. At the end of the two-year period, buyers would be eligible to buy their own condominiums.

During the construction period, Bank of America developed and launched an innovative mortgage program for people who had good credit, but did not have the downpayment for a new home -- the Neighborhood Advantage Zero Down(TM) product The availability of the Zero Down program resulted in accelerating the homeownership process for the approved applicants in Old Town. Because of this product, the original lease/purchase plan by Keating was changed to a direct sales program that allowed the families to become homeowners immediately rather than going through the two-year lease/purchase period.

"We are very excited to be offering a product that has made homeownership possible for families in the Old Town Square project," said Barbara Desoer, President of Northern California Banking, Bank of America. "The Zero Down mortgage program demonstrates Bank of America's continued commitment to provide affordable homeownership opportunities to those who might not otherwise qualify for home loans. It also demonstrates our continued commitment to residents in the City of Oakland."

Financing for Old Town Square required that all of the units had to be contracted with qualified buyers before construction would begin. The financing included nearly $4 million in grants and loans from the City of Oakland and a tax-exempt bond issue purchased by Wells Fargo Bank

The City donated the land for the Old Town Square, setting aside two and a half blocks for the redevelopment effort. Marketing began in July of 1996 and the response was overwhelmingly positive. The campaign resulted in more than 330 applications for the homes; 220 of which were pre-qualified for income and credit. Other families are signing up for the next phase of planned home development similar to this first project. As a result of the successful marketing efforts, construction on the project began in January of 1997.

"Old Town Square will provide homeownership opportunities for people who have found it difficult to save for a downpayment; seek convenience and easy access to their downtown jobs; and want to be part of Oakland's revitalization," said California Assemblyman Don Perata. "This is an example of the opportunity that can be created when the private and public sectors work together as a team."

The majority of the people working on the project have been Oakland-based and more than seventy-five percent of the new homeowners are currently residents of Oakland.