More Than 120,000 Chicago Families Benefit from Fannie Mae's 'HouseChicago' Affordable Housing Plan; Company Exceeds Goal with More Than $10 Billion Invested in Four Years

Business Wire, Sept 28, 1999

CHICAGO--(BUSINESS WIRE)--Sept. 28, 1999--

CEO Frank Raines Targets More Than $1 Billion to Increase

Minority Homeownership Rate

Building on its successful "HouseChicago" affordable housing plan, Fannie Mae (NYSE:FNM), the nation's largest source of financing for home mortgages, today committed 50 percent of its single-family business to serve minority families.

Chicago Mayor Richard M. Daley, Alderman Daniel Solis (25th Ward) and Paul Swan, vice chairman of Bank One Mortgage, today joined Fannie Mae's Chairman and CEO, Franklin D. Raines to announce the company's pledge to commit more than $1 billion to increase the minority homeownership rate in the city, as the next step within the "HouseChicago" plan. Raines also announced that the company exceeded its original "HouseChicago" goals with more than $10 billion invested in four years benefiting 120,550 local families.

"Today's announcement is likely the largest single investment that any company has made in any community to serve minority families. The commitment is necessary because we continue to suffer from a racial homeownership gap. While minority homeownership rates are rising, they're still below 50 percent, versus 74 percent among white families, and we can work the mortgage system to serve minority families and their communities better," said Raines.

He continued by noting, "We are pleased that in only four years, we've made an impact beyond our initial expectations. It's only by working closely with the city, local lenders, developers, real estate professionals, nonprofits and other local government agencies that we've been able to exceed our original goals."

"People from all over the world come to Chicago seeking economic opportunity. Affordable homes and good schools should be a major part of the opportunity," said Mayor Daley. "Owning a home is part of the American dream and key to revitalizing our neighborhoods and improving our communities and schools. Fannie Mae has been a key partner to the city, lenders, nonprofits, and the housing industry in developing programs that create homeownership opportunities and make a difference in peoples' lives."

To meet the new stretch goals, Raines announced two new initiatives to increase homeownership opportunities for minorities and new immigrants: a long-term minority homeownership initiative and the New Immigrants Initiative, designed to break down barriers to underserved groups.

Fannie Mae's minority homeownership initiative is a five-year plan designed to provide flexible mortgage products, services and technology to targeted communities through local partnerships. Fannie Mae has committed to work with selected lenders, community developers, counseling agencies, churches, real estate professionals, and key housing advocates to close the homeownership gap between minorities and non-minorities by supporting minority borrowers who are on the path to owning a home.

Key elements of the New Immigrants Initiative include: down payments as low as 3 percent for eligible working, non-permanent residents who have applied for their permanent resident card (commonly known as a "green card"); more flexibility for borrowers with cash-on-hand; allowing use of the borrower's most recent hourly wage rate to determine qualifying income; recognizing boarder income from relatives living in the same household; and utilizing part-time or multiple job income of a 12-month duration averaged over the most recent 24 months. Eligible borrowers must have lived and worked in the United States for two consecutive years and can include refugees, asylees, family sponsored immigrants, and visa lottery winners. U.S. citizens and permanent residents are also eligible to apply.

"Fannie Mae has been a true partner in making Chicago a welcome place for new immigrants and minority families who struggle to make ends meet. As a socially responsible company, many groups and agencies have been touched by their good will and hard work," said Alderman Solis, chairman of Mayor Daley's Chicago Citizenship Assistance Council. "This unique public-private partnership between Fannie Mae and its partners means more money and resources will be available for home buyers, keeping the American dream of homeownership affordable."

"We will continue the expansion of home-buying opportunities by improving the quality of housing and removing barriers to homeownership," said Swan. "Fannie Mae's significant investment plan and new targeted expansion leverages other affordable-housing initiatives in the city. Together we can help more people achieve the dream of home ownership as we rejuvenate our neighborhoods and strengthen our communities."

Highlights of "HouseChicago"

In 1995, Fannie Mae and the City of Chicago created "HouseChicago," a commitment to provide $10 billion in financing over seven years and to increase homeownership and rental housing opportunities for more than 125,000 families. In a little over four years, Fannie Mae has invested more than $10 billion in housing finance for more than 120,500 families. In June 1998 Fannie Mae expanded the plan to a ten-year $12 billion commitment, at the request of the City of Chicago, to coincide with the city's five-year $1.2 billion affordable housing plan. Since "HouseChicago" first was launched, 45 percent of the mortgage loans Fannie Mae has purchased from lenders went to first-time home buyers, 39 percent to minority home buyers and 60 percent went to low- and moderate-income borrowers.