Affordable Housing Partnership Launches New Purchase/Rehab Program in Boston.

BOSTON--(BUSINESS WIRE)--Oct. 23, 1998--In an enterprising effort to address the needs of affordable housing in Boston, BankAmerica Mortgage, in partnership with Fannie Mae and the Metropolitan Boston Housing Partnership (MBHP) has entered the residential mortgage rehab market. Today, a special purchase/rehab pilot was launched that offers the borrower just one loan to pay for both the purchase and rehabilitation of the home.

The initiative seeks to enhance homeownership possibilities in the region's vital and older neighborhoods for lower-income residents. "Hundreds of two-and three-family homes in the metropolitan Boston region need repair and are great opportunities for affordable housing -- if we create flexible and affordable ways for buyers to renovate," said Arthur Ringwald, National Production director at BankAmerica Mortgage. "Bank of America is pleased to join forces with Fannie Mae and Metropolitan Boston Housing Partnership to provide this essential alternative in affordable housing."

The program will be marketed through an aggressive educational campaign targeting real estate professionals and community-based nonprofit organizations that provide comprehensive homebuyer education.

Much of the affordable housing stock in Boston is made up of two-and three family homes that are often in need of renovation. In Boston approximately 60 percent of the housing stock was built nearly 60 years ago; an additional 24 percent of the homes are more than 30 years old.

"Fannie Mae continues its strong effort to reach our Trillion Dollar Commitment to help an additional ten million families achieve the dream of homeownership. This partnership with Bank of America provides a financial product that increases the availability of homes for low, moderate and middle income Americans," said Robin Drill Campbell, Director of the Fannie Mae Boston Partnership Office.

"This new loan product will make purchase and rehab an option for many more low and moderate income homebuyers in the greater Boston area," said MBHP Executive Director, Gary Officer. "Our collaboration with Bank of America and Fannie Mae will further strengthen our successful Rehab Assistance Program which has helped nearly 100 homebuyers obtain purchase and rehab loans over the last two years."

This new rehab/purchase product has many advantages for low and moderate-income borrowers. First, they may receive up to 95 percent financing for one-and two-family homes and up to 90 percent on three-family homes. In addition, buyers purchasing a single family home can take advantage of a 3/2 downpayment feature where 3 percent of the downpayment must be the borrower's own funds. The remaining 2 percent may come from a gift or a grant. There are no income limits for two-and three-family homes and no income limits for single family homes when the 5 percent down-payment is from the borrower's own funds.

There are two situations where income limits may apply: 1) when using the 3/2 down-payment option and 2) for properties outside of the City of Boston. The borrower may also include up to six months of mortgage payments in the home loan. Borrowers who purchase a two-or three-family home, can also receive rental credit. This allows families to qualify at a lower income.

To apply for a purchase/rehab loan, borrowers must complete homebuyer and landlord education sessions (if applicable) provided by nonprofit organizations such as Massachusetts Affordable Housing Alliance, the Metropolitan Boston Housing Partnership and the Allston-Brighton Community Development Corporation.

BankAmerica Mortgage will be responsible for originating the loans and will market the product by sponsoring comprehensive homebuyer education programs provided by local qualified nonprofit organizations. The mortgage group will also conduct training sessions for Realtors whose service areas include Boston MSA communities that would benefit from this initiative. Fannie Mae will purchase the loans originated by BankAmerica Mortgage -- providing an outlet for these special mortgage loans.

Metropolitan Boston Housing Partnership (MBHP) will work together with BankAmerica Mortgage providing the initial evaluation of the condition of the building, the cost estimate of necessary repairs and a list of qualified contractors. MBHP will also assist in contractor selection, monitor the rehabilitation work and conduct the final inspection of the home.

BankAmerica Mortgage is part of the new Bank of America, formed through the merger of NationsBank Corporation and BankAmerica Corporation. Bank of America, with $572 billion dollars in assets, is the largest bank in the U.S., with full-service operations in 22 states and in the District of Columbia. Bank of America provides financial products and services to 30 million households and two million businesses, as well as international corporate financial services for business transactions in 190 countries. Its stock (NYSE:BAC) is listed on the New York, Pacific, London and Tokyo stock exchanges.

Fannie Mae is a congressionally chartered, shareholder-owned company and the nations' largest source of funds for home mortgages. It has committed to provide $1 trillion in targeted lending for ten 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 under-served 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.

The Metropolitan Boston Housing Partnership is a non-profit organization dedicated to creating and preserving affordable housing opportunities for low-income families and providing residents with an expanded level of housing quality, choice and self-sufficiency opportunities. Founded in 1983 by business, government and civic leaders, MBHP serves 10,000 families in Boston and 33 surrounding communities.