Cambridgeport Bank Introduces 1% Down Payment Mortgage with No Mortgage Insurance For First-Time Homebuyers; New Program Will Allow Many To Achieve Dream of Home Ownership.

Business Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jan. 29, 2001

Cambridgeport Bank today announced that it has introduced a new, exciting mortgage program that will make home ownership more affordable for first-time homebuyers and people who have not owned a home in the last three years.

The new mortgage program, a fixed-rate mortgage with a 30-year term, features a one percent down payment and no mortgage insurance. The offering of the new program is being made possible as a pilot program through an alliance between Cambridgeport Bank, Fannie Mae (FNM/NYSE), the nation's largest source of financing for home mortgages, and Self-Help, a community economic development lender based in North Carolina.

"We are pleased to continue our long tradition of helping individuals and families become homeowners," stated James B. Keegan, President and Chief Executive Officer of Cambridgeport Bank. "This new program should help reduce the down payment obstacle that many families may face in their desire to own a home."

Keegan indicated that Cambridgeport Bank conceived the new mortgage program and proposed it to Fannie Mae, who brought in Self-Help. After a loan is originated by the Bank, it is purchased by Self-Help, which in turn sells the loan to Fannie Mae. Fannie Mae then packages the loan as a mortgage-backed security that is purchased by investors. Cambridgeport Bank continues to service the loan.

The new program combines a number of features to help improve affordability and qualification. For example, with a $150,000 purchase price for a single family home, a borrower would only need to make a $1500 down payment. The program is made even more affordable as closing costs may include the borrower's own funds, gifts, grants or money from a down payment assistance program.

"Each loan application will be considered on an individual basis," stated Bruce C. Ocko, Senior Vice President of Retail Lending at Cambridgeport Bank. "It is our hope that this program will help many people realize their dream of becoming a homeowner," he added.

For example, to help with qualification, consideration will be given for nontraditional credit histories. If a traditional credit history is not available, a minimum of four sources of nontraditional credit will be considered. All sources of credit must have at least a twelve-month history. For two and three family homes, qualification consideration will even be given for a percentage of the anticipated rental income.

The absence of a mortgage insurance requirement can also help make monthly payments more affordable. For example, the monthly mortgage insurance premium on a 3% down, standard $150,000 mortgage can be $130 per month. With this program, that cost is eliminated.

"This is an exciting new program that will help more working men and women achieve the American Dream of homeownership. With rents so high throughout Massachusetts, many people find that they can afford the cost of a monthly mortgage, but have little left over to save for a down payment. This program helps reduce that obstacle, making homeownership much more attainable. I commend Cambridgeport Bank and Fannie Mae for their efforts," stated Rep. Mike Capuano.

The one percent down payment program is available for single-family homes up to $275,000 and for two family homes up to $351,950. For three family homes the down payment requirement is 10 percent with loan amounts up to $425,400.

The program is available on homes purchased within Cambridgeport Bank's community reinvestment assessment area, which includes the towns of Arlington, Bedford, Belmont, Boston, Braintree, Brookline, Burlington, Cambridge, Canton, Dedham, Dover, Framingham, Lexington, Lincoln, Medford, Milton, Natick, Needham, Newton, Norwood, Quincy, Randolph, Sherbourne, Somerville, Stoneham, Walpole, Waltham, Watertown, Wayland, Wellesley, Weston, Westwood, Weymouth, Winchester and Woburn. The borrower's income can be up to 115% of the HUD median area income.

"Fannie Mae believes in the power of partnerships to help more people purchase homes," said Robin Drill, Director of Fannie Mae's Massachusetts Partnership Office. "We look forward to working with Cambridgeport Bank to help many more families purchase their first home."

"We are very enthusiastic about working with Cambridgeport Bank and Fannie Mae on this new program," said David Buchholz, Coordinator of Lender Partnerships at Self-Help. "We believe that this new, flexible mortgage product will help many families achieve homeownership for the first time."

Founded in 1853 in Cambridge, Cambridgeport Bank is a Massachusetts-chartered stock bank that is a wholly owned subsidiary of Port Financial Corp. (NASDAQ:PORT). Port Financial Corp. had assets of $949.2 million as of September 30, 2000. At its last Community Reinvestment Act (CRA) Performance Evaluation, the Bank received a rating of "outstanding" from the FDIC.

Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages. Fannie Mae is working to shrink the nation's "homeownership gaps" through a $2 trillion "American Dream Commitment" to increase homeownership rates and serve 18 million targeted American families by the end of the decade. Since 1968, Fannie Mae has provided $2.9 trillion of mortgage financing for over 35 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Self-Help is one of the nation's leading community development financial institutions, with a 20-year, $700 million record of helping 11,000 low-wealth borrowers buy homes, build businesses, and strengthen community resources. In 1994, Self-Help began providing an alternative source of liquidity for North Carolina mortgage lenders' CRA products. This program successfully demonstrated the need for - and the financial soundness of - investing in affordable mortgages. Self-Help's partnership with the Ford Foundation and Fannie Mae has enabled Self Help to expand this to a nationwide program.

Example for illustrative purposes only: $150,000 Loan Amount; $1,500 down payment; 8.15% interest rate, no points; APR 8.189%: 360-month term; $7.44 per 1000 borrowed; 360 monthly principal and interest payments of $1116.00. Call for current rate information.

Cambridgeport Bank 1% Down Payment Mortgage Fact Sheet

This Fact Sheet is a companion sheet to the January 29, 2001 press release entitled "Cambridgeport Bank Introduces 1% Down Payment Mortgage with No Mortgage Insurance For First-Time Homebuyers"

--The 1% down payment mortgage has been designed for first-time homebuyers and homebuyers who have not owned a home in the last 3 years. It features a very low 1% down payment and no mortgage insurance, providing both upfront cash savings as well as ongoing monthly savings.

--The program is available on homes purchased within Cambridgeport Bank's community reinvestment assessment area, which includes the towns of Arlington, Bedford, Belmont, Boston, Braintree, Brookline, Burlington, Cambridge, Canton, Dedham, Dover, Framingham, Lexington, Lincoln, Medford, Milton, Natick, Needham, Newton, Norwood, Quincy, Randolph, Sherbourne, Somerville, Stoneham, Walpole, Waltham, Watertown, Wayland, Wellesley, Weston, Westwood, Weymouth, Winchester and Woburn. The borrower's income can be up to 115% of the HUD median area income.

--The program is available for owner-occupied one-family homes with a 1% down payment and a minimum of $1000 from the borrower's own funds, with loan amounts up to $275,000.

--For two-family owner-occupied homes, there is a 1% down payment and a minimum of $2500 from the borrower's own funds with loan amounts up to $351,950.

--For three-family owner-occupied homes, there is a 10% down payment requirement, five percent which must be from the borrower's own funds, with loan amounts up to $425,400.

--Closing costs may include borrower's own funds, gifts, grants or down payment assistance programs (secured or unsecured).

--To help the borrower prepare to be a homeowner, successful completion of a homebuyer education course is required as well as landlord counseling if the home being purchased is a two or three family home.

--Consideration will be given for a portion of the anticipated rental income in determining qualification.

--If a traditional credit history cannot be obtained, a minimum of four sources of nontraditional credit will be considered. All sources of credit must have at least a 12-month history.

Member FDIC/Member DIF Equal Housing Lender