City of Oakland, Bank of America, Freddie Mac and Local Non-profit Groups Launch Unprecedented $1 Billion - 5 Year Housing Commitment.

OAKLAND, Calif.--(BUSINESS WIRE)--Sept. 15, 1999--

10,000 Oakland Families Expected to Benefit from

New Oakland Homeownership Alliance

Oakland Mayor Jerry Brown announced today a new one billion-dollar, five-year public-private-nonprofit partnership that will dramatically increase new affordable homeownership opportunities in the city. The Oakland Homeownership Alliance is a collaboration between the City of Oakland, Bank of America, the Federal Home Loan Mortgage Corp. (Freddie Mac), the Home Buyer Assistance Center, the Low Income Housing Fund, the Local Initiatives Support Corporation and other local nonprofit groups.

Although the program will be available citywide, the Alliance is focusing its efforts on seven neighborhoods where the need is greatest: North Oakland, West Oakland, Chinatown and Central, San Antonio, Fruitvale, Central East Oakland and Elmhurst.

"This commitment by the Oakland Homeownership Alliance will enable 10,000 additional families to buy homes in Oakland," said Mayor Jerry Brown. "It should boost Oakland's homeownership by five percent -- from 42 to 47 -- in five years."

In a wide-ranging series of commitments, Bank of America has pledged to infuse one billion dollars into Oakland in new mortgage capital over the next five years. To make this possible, Freddie Mac, the secondary lending participant has agreed to share the risk and to purchase the bank's eligible innovative and affordable home loan products so that capital can be freed up for new homebuyers. The Home Buyer Assistance Center will coordinate the initiative and the Low Income Housing Fund (LIHF), Local Initiatives Support Corporation (LISC) and Consumer Credit Counseling will provide the essential financial and support services for homeownership. These services include a full range of financing, debt management, down-payment assistance, and education on the entire home buying process.

After examining barriers to homeownership for low- and moderate-income residents in Oakland, the Alliance designed programs to address the traditional issues of affordability, lack of down-payment, and a good credit standing as well as nontraditional issues such as: property rehabilitation, neighborhood-based family daycare and developing a homeownership incentive for Oakland's employers to offer to their workforce.

"Bank of America is pleased to be a participant in the Oakland Homeownership Alliance. The low homeownership rate in the City of Oakland is a function of affordability and flexibility which is why the particular elements of this initiative are so important," said Dennis Watson, manager of Community Development in Northern California for Bank of America. "Bank of America's new homeownership financing tools like the Neighborhood Advantage Credit Flex and Zero Down mortgage products will open doors to homeownership that were previously closed, thereby rejuvenating and stabilizing the neighborhoods in Oakland."

"The Oakland Homeownership Alliance is one of the nation's most ambitious and intensive new efforts to make homeownership accessible to a city's low- and moderate-income families," said Craig Nickerson, vice president of Community Development Lending at Freddie Mac. "We are delighted to work so closely with Mayor Brown, the Bank of America and all of the capable and dedicated organizations that have come together to make this initiative -- and affordable homeownership opportunities for thousands of Oakland families -- a reality."

Key Initiative Features

Bank of America's Neighborhood Advantage Credit Flex and Zero Down mortgage products will be the featured mortgage products offered through the alliance. Freddie Mac's purchase commitment will help ensure the continued availability of these mortgages. Neighborhood Advantage products offer underwriting flexibility as well as low cash-to-close options that will qualify more low and moderate income home buyers.

The Oakland Homeownership Alliance has developed several key programs to be delivered to the City of Oakland.

The Lease-Purchase Program for example, allows a borrower who is not yet ready to purchase, to lease the residence for three years. Two unique features of this program will enable borrowers to forgo making a downpayment or qualifying for credit at the beginning of the lease. This allows the new leaseholder the opportunity to become a homeowner with less up-front money and to rectify any credit impairments over the course of those three years.

Another innovative feature of the initiative is the Family Daycare/Homeownership Program. This program will enable low- and moderate-income daycare providers to achieve homeownership with special financing. Family day care homes are primarily women-owned businesses providing vital services to low income communities.

In addition, LISC and LIHF will work with community based organizations in Oakland to provide technical support and business assistance to family day care providers for their facility needs.

"LISC is pleased to be part of this Alliance, especially in working to address the dual needs of promoting homeownership, and in expanding safe and affordable childcare opportunities for area families," said Stephanie Forbes, program director for Bay Area LISC. "While creating safe and decent housing, both rental and for-sale, has proved a key building block to community renewal, creating quality community institutions and services is also essential. Working mothers and fathers need to know their children are safe and secure. Promoting homeownership among home childcare providers addresses this need."

Another goal of the Oakland Homeownership Alliance is to focus on the rehabilitation of some of the old housing stock in Oakland and bring these homes up to livable standards.

The Acquisition Rehab Program will provide financing to community-based nonprofit groups to acquire and rehabilitate distressed properties. After the homes are complete, the City of Oakland will provide mortgage assistance to low income people to make these homes affordable.

"The Low Income Housing Fund is thrilled to join with the other partners in the Alliance to increase the number of homes affordable to low-income homebuyers in Oakland," said Nancy O. Andrews, President. "Thanks to the multiple resources of the partners, community based organizations in Oakland will have access to seamless financing for their homeownership developments."

For borrowers with serious credit blemishes, the Oakland Homeownership Alliance has set up a Debt Management Mortgage Program through the Consumer Credit Counseling Services, another alliance participant. This program allows borrowers to re-establish their credit reputation in a very short period of time.

The Alliance has also created an Employer's Assistance Homeownership Program that encourages Oakland businesses to promote homeownership in Oakland to their workforce by providing down payment and closing cost assistance.

The Home Buyer Assistance Center (HBAC) will coordinate the Oakland Homeownership Alliance by overseeing all of its programs. The strategy is to provide comprehensive, one-stop home buying assistance that covers all aspects of the home buying process through a case management approach that provides a detailed home buying plan for every client. This creates the personal touch homebuyers need when making the most important purchase of their lives.

HBAC will also handle marketing and outreach services; provide regular information and orientation sessions; offer one-on-one interviews and counseling including pre-qualification assistance; coordinate customer services with other agencies, schedule lender meetings; work with developers and real estate professionals; gather information about public agency programs.

"Home Buyer Assistance Center has been working with the community for over 5 years providing information, one-on-one counseling, education and support for low-to-moderate income first-time home buyers," said Francine McKinney, President of Home Buyer Assistance Center. "Our participation in the Alliance will provide a "one stop" resource to make these services more readily available to the residents of Oakland. We are pleased to have the opportunity to work with the City of Oakland, Bank of America, and Freddie Mac to help them achieve their goals and to assist the residents of Oakland pursuing homeownership."

Bank of America, with $614 billion in assets, is the largest bank in the United States. The company serves more than 30 million households and 2 million businesses across the country. It provides comprehensive international corporate financial services for clients doing business around the world. The company creates financial relationships featuring a full array of financial services, from traditional banking products to investments and capital raising within the securities markets.

Freddie Mac is a stockholder-owned corporation chartered by Congress in 1970 to create a continuous flow of funds to mortgage lenders. By supplying lenders with the money to make mortgages and packaging the mortgages into marketable securities, Freddie Mac sustains a stable mortgage credit system and reduces the mortgage rates paid by homebuyers. Over the years, Freddie Mac has opened the doors for one in six homebuyers in America and two million renters. (More information on Freddie Mac can be found on the company's web site located at http://www.freddiemac.com.)

LISC is the nation's leading community development support organization. Through its 43 program offices nationwide, including the Bay Area, LISC has invested more than $3 billion to help local nonprofit developers create almost 100,000 new homes and apartments and more than 11 million square feet of commercial, industrial and retail space.

Since its creation 20 years ago, LISC has secured grants, loans and equity investments from some 1,800 of the country's leading corporations and foundations, and its investment has leveraged another $3.5 billion in public and private funds to support a total of almost $7 billion worth of development in the United States' hard-pressed urban and rural communities.

LIHF is a national community development financial institution engaged in high-volume lending and technical assistance to nonprofit organizations working to increase the supply of affordable and special needs housing as well as community facilities in low-income neighborhoods. LIHF's mission is to promote economic advancement and self-sufficiency for the very poor. To this end, LIHF provides a crucial link between community-based development organizations, capital markets and other sources of financing.

With offices in San Francisco, New York and Los Angeles, LIHF's lending and technical assistance has helped hundreds of nonprofit organizations that serve the nation's hardest-to-reach populations. Over the past 15 years, LIHF has provided capital and technical assistance totaling $176 million in 35 states across the nation. LIHF's assistance, in turn, has leveraged investments in poor communities of over $1.5 billion.

Home Buyer Assistance Center (HBAC) is a nonprofit organization with a mission to increase homeownership opportunities for low-to-moderate income and minority households. HBAC has been providing home buyer education and one-on-one counseling to support first-time homebuyers throughout the bay area for over five years. In addition to serving and providing information to "walk-in" clients, HBAC also works with local city agencies that have assistance programs for first-time homebuyers and nonprofit organizations developing affordable housing.

Visit the Alliance's web site at www.oakhome.com or call 1-888-832-0909 for more information.