Allstate buys $5 million bond for New Mexican home loans.

Co. said Monday it will purchase a $5 million mortgage revenue bond from the New Mexico Mortgage Finance Authority, enabling qualifying residents from Santa Fe, Bernalillo, Dona Ana counties and in other communities across New Mexico to obtain low-interest mortgage loans under a newly created program known as Neighborhood Investment Creating Housing.

At a press conference here to announce the program, U.S. Sen. Pete Domenici (R-N.M.) applauded the unique public and private sector initiative, noting the program will provide much needed affordable housing to New Mexicans.

Other groups joining Allstate and the Mortgage Finance Authority in the program include local banks, Neighborhood Housing Services of America (NHSA), and three Neighborworks organizations that serve the state.

Allstate Chairman Jerry D. Choate said the revenue bond purchase was another example of Allstate's commitment to support neighborhood revitalization programs nationwide through its urban investment initiati ve and by direct support to community organizations. Allstate has invested more than $1 billion in municipal bonds that support single and multi-family housing programs.

Allstate's purchase of the mortgage bond at a below market rate of return and the MFA's issuance of tax-exempt bonds to reduce the interest rate even further, allows modest-income families to realize the dream of home ownership at a 6.4 percent interest rate.

NHSA helped develop the program and will underwrite the loans. Local banks will fund and close the loans, while the Neighborworks organizations (Neighborhood Housing Services of Santa Fe, Tierra Del Sol Housing Corp., and Neighborhood Housing Service of Albuquerque), will package the loans and provide comprehensive pre- and post-purchase training to each borrower.

This ``Full Cycle Lending'' approach reduces the number of problem loans, improving the quality and safety of the loans for the investor. The delinquency rate of the Santa Fe NHS' portfolio is well below that of private sector lenders. The program will be available immediately. For more inforiation, borrowers can contact their local Neighborworks organizations.

The Allstate Corp. is the parent of Allstate Insurance Co., the nation's largest publicly held property and casualty insurance company, with more than 20 million customers and approximately 14,500 full-time agents in the U.S. and Canada. Established in 1931 by Sears, Roebuck and Co., Allstate is also a major life insurer.

CONTACT: Allstate

Cheryl Procter, 708/821-1426

or

N.M. Mortgage Finance Authority

Shawn Ellison, 505/843-6880