Broadway Federal Bank Approved to Deliver $25 Million of Small Multifamily Loans to Fannie Mae

Business Wire, Dec 20, 2000

Business Editors

LOS ANGELES--(BUSINESS WIRE)--Dec. 20, 2000

Broadway Financial Corp. (the "Company") (Nasdaq:BYFC), the holding company of Broadway Federal Bank, f.s.b. ("Broadway Federal" or "Bank"), today announced that Fannie May (NYSE:FNM), the nation's largest source of financing for home mortgages and multifamily financing, has approved Broadway Federal as a pilot lender to deliver $25 million in small multifamily loans.

Paul C. Hudson, Broadway Federal President/CEO, stated, "This is the first Fannie Mae pilot for which the Bank has received approval to participate."

Hudson went on to note, "Fannie Mae has exhibited a commitment to addressing the liquidity needs of small lenders, as well as the credit needs of small multifamily borrowers and low-income minority communities."

Seventy-four percent (74%) of the Bank's total loan originations for the past 24 months have been small multifamily loans. Development of the Fannie Mae pilot was crucial to the Bank's liquidity and asset allocation objectives.

Fannie Mae committed $25 million to the pilot with terms that include 10-year fixed rate loans with 30-year amortization on multifamily properties with five to 50 units, maximum loan-to-value of 75%, and loan limits from $250,000 to $1.5 million.

Broadway Federal determined that the credit risk profile of small multifamily loans had improved as a result of better managerial expertise of the borrowers and a strong economy that produced lower vacancy rates and growth in rents. In addition, multifamily loan products produced higher interest margins and were often originated on an adjustable rate basis.

"Fannie Mae worked with Broadway Federal to develop a pilot that was competitive and met local market demands," said Heidi McKibben, vice president of Multifamily Lending for Fannie Mae.

"Fannie Mae looks forward to working with Broadway Federal to develop a strong and successful relationship that benefits small multifamily borrowers in Los Angeles and the many families that they house."

This news release contains certain forward-looking statements that are subject to various factors that could cause actual results to differ materially from such statements. Such factors include, but are not limited to, the possibility that the repurchase transaction discussed herein may not be consummated or may be delayed due to changing economic, market or business conditions.