Bank of America Makes Unprecedented 90-Day Effort to Support Affordable Housing in California; 4,000 Housing Units Preserved.

SAN FRANCISCO--(BUSINESS WIRE)--July 20, 1999--

Bank of America has just completed a three-month financing blitz in California that will result in the preservation, rehabilitation, or construction of nearly 4,000 units of affordable housing throughout the state.

Between March 10, when the state issued bond allocations for affordable housing, and June 14, when the 90-day window for purchasing the bonds expired, Bank of America completed 25 bond-financed transactions for $188 million -- 27 percent of the statewide total. (See attached list.) An additional 15 affordable housing loans booked by Bank of America during that same time period increased the bank's total affordable housing financing in California to $202 million.

"We had loan specialists working weekends and sometimes around the clock to complete these deals," said Lindy Hahn Sanders, Western Region Manager for Affordable Housing at Bank of America. "I've never seen anything like it and no financial institution has ever done so much in such a short time."

Sanders points out that affordable housing is a high priority for state and local government agencies in California. "Providing adequate living space that people can afford is at or near the top of the government's must-do list," she says. "But they can't do it alone, they need to partner with nonprofit developers and financial institutions. As the state's premier financer of affordable housing, Bank of America is involved in more transactions than any other institution, public or private."

Affordable housing financing is a complex business. According to Sanders, "Each transaction is unique and it isn't always easy to find the key to making any given deal work. But we've got some of the most experienced, creative and dedicated professionals in the business and they have shown that they will do whatever it takes to make housing affordable."

One recent success was a $6.75 million bond purchase that will enable 72 low-income residents of Golden Gate Apartments in San Francisco's Western Addition neighborhood to remain in their homes. The 20-year clock on the Section 8 federal housing subsidy was running down and the owner would have been able to exercise his option to convert the building to market-rate housing, which the tenants would not have been able to afford.

Bank of America worked with the San Francisco Mayor's Office of Housing and the San Francisco Redevelopment Agency to find a way for HUD to continue the federal interest subsidy payments for new owners. The bank then structured a bond issue to enable the Chinatown Community Development Center -- a nonprofit housing corporation -- to acquire the property, do some necessary rehabilitation work, and still keep rent payments within reach of the current tenants.

"The resident's of Golden Gate Apartments faced a real threat -- a hot real estate market and an owner who wanted to test that market. This creative and collaborative financing plan will avert that threat for a long time to come and keep these units affordable," said Chinatown Community Development Center Executive Director Gordon Chin.

Historically, tax-exempt affordable housing bonds were purchased by investment houses, not commercial banks. In the early 1990s, however, Bank of America became one the few commercial banks to enter this business. Today, the bank is the largest and most experienced purchaser of these bonds, which account for 50-70 percent of all affordable housing financing in the United States.

"There is a real crisis in affordable housing in California and around the nation, as the Section 8 subsidies are expiring at a rapid rate," according to Lindy Hahn Sanders. "When a subsidy runs out, the units convert to market-rate housing unless a method can be found to keep rents down. There are a lot of financial institutions that will finance a conversion to market rate; Bank of America is one of the few with the commitment to preserve these developments as affordable housing and the expertise to make it happen."

www.bankamerica.com

Bank of America Affordable Housing Bond Financing in California

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           Project Name                 Location           Bond Amount

 1  Saratoga Senior Apartments           Vacaville          $4,954,563
 2  Sycamore Point Apartments            Woodland            7,867,306
 3  Elk Ridge Apartments                 Sacramento         10,270,253
 4  The Gardens Apartments               San Jose           22,051,074
 5  Vista Sonoma                         Santa Rosa         12,153,859
 6  Maplewood/Golden Glen                Concord             5,100,000
 7  Alegria Apartments                   Los Angeles         3,577,073
 8  Salinas Senior Apartments            Salinas             5,745,600
 9  Poinsettia ApartmeApartments            E. Palo Alto       11,000,man
       1,700,000
14  Vintage Garden  illtop             Richmond           12,170,000
21  Rosewood Apartments                  Escondido           4,227,000
22  Willows Apartments                   San Bernardino      7,135,000
23  Copper Lane Apartments               Bakersfield         4,192,500
24  Northgate Apartments                 Santa Cruz          7,070,000
25  Ohlone Chynoweth Commons Apartments  San Jose           16,200,000

                                                    TOTAL $188,135,611