Company Completes Five-Year `HouseDetroit' Commitment Two Years Early; Fannie Mae Announces New $1 Billion Plan to Increase Homeownership in Detroit.

Business Editors

DETROIT--(BUSINESS WIRE)--April 24, 2000

Fannie Mae today announced it will commit $1 billion to help house 25,000 Detroit families in the next seven years. The commitment was made as Fannie Mae (NYSE:FNM
FNM Free National Movement (Bahamas)
FNM Foot and Mouth ), the nation's largest source of financing for home mortgages, celebrated the completion of their original $400 million "HouseDetroit" plan two years early.

Since 1997 the company has invested $562 million in Detroit neighborhoods to help 9,800 families find quality, affordable housing in the city. U.S. Representatives John Conyers, Jr. (D-MI), and Carolyn Kilpatrick (D-MI), and Detroit Mayor Dennis Archer joined Fannie Mae and housing leaders for the announcements at the home of first-time homeowner Theresa Moses in Detroit, MI. Moses' home purchase was made possible through a partnership with Fannie Mae and U-SNAP-BAC, a nonprofit housing corporation.

The new $1 billion HouseDetroit plan is part of the company's recently announced $2 trillion American Dream Commitment. It will place a special emphasis on increasing homeownership among minorities, young families, women-headed families, new immigrants, and others whose homeownership rates lag the general population. This commitment will also target Americans who have not fully benefited from the economic expansion of the past ten years, including many who live in economically depressed urban and rural areas.

"Fannie Mae's investment in Detroit's neighborhoods has contributed greatly to Detroit's recovery," said Mayor Archer. "Thanks to Fannie Mae and its housing partners, thousands of families have experienced the American Dream of homeownership. The announcement of an additional $1 billion is a critical part of Detroit's continuing efforts to strenghthen and revitalize our neighborhoods and provide quality, affordable housing for our residents."

"Fannie Mae has been a key partner to the city of Detroit, lenders, nonprofit organizations, and the housing industry in developing initiatives that create homeownership opportunities and make a difference in peoples' lives," said Rep. Conyers. "I am pleased to see Fannie Mae increase its commitment to our city."

"Homeownership is the cornerstone of stable communities and an important component of our overall economy," said Rep. Kilpatrick. "Fannie Mae's $562 million investment in Detroit's families and neighborhoods, and its new plan to add another $1 billion will help to revitalize communities throughout the city."

HouseDetroit Accomplishments

"The results of HouseDetroit speak volumes for Fannie Mae's partnership with local lenders and groups, and their great commitment to helping Detroit families find affordable housing," said Maureen Warren, vice president of housing and community development for Fannie Mae's Midwestern Regional Office in Chicago. "Under our new $1 billion investment plan, Fannie Mae will continue working with its partners, including local lenders, local governments, Realtors and housing agencies, to find new ways to meet Detroit's diverse housing needs."

Fannie Mae's investment in Detroit is as diverse as the city itself. According to Warren, of the more than $560 million in affordable mortgage financing provided by Fannie Mae in the first three years of HouseDetroit, more than 70 percent served minorities, 72 percent served low- and moderate-income families and more than one-third served first-time home buyers. Nearly a quarter of the loans went to families earning less than half of the area median income ($30,250) and more than 38 percent were to women borrowers. The youngest borrowers were 18 years old and the oldest were nearly 100 years old.

At today's announcement, Warren outlined several key components of HouseDetroit's successful third year, including:

-- Detroit's largest-ever Faith Based Development Conference

hosted by Fannie Mae in October 1999 in which more than 70

area pastors participated. The Conference participants

initiated "Operation Community Redemption," a faith-based

initiative to reclaim neighborhoods and increase

homeownership. Congregations participating in the initial

phase of "Operation Community Redemption" include: Bethel 

A.M.E. Church; Second Ebenezer Baptist Church; Plymouth United

Church of Christ; Greater Christ Baptist Church; Christ United

Methodist Church; Ebenezer AME Church; and Corinthean

Missionary Baptist Church.

-- The Detroit Homeownership Counseling Collaborative (DHCC)

launched in December 1999 by Fannie Mae and 60 local partners.

The DHCC is a newly created nonprofit organization with a

mission to create opportunities for consumers to achieve and

maintain homeownership. The DHCC has established a home-buyer

resource center to help ensure appropriate levels of

home-buyer education and counseling before, during and after

buying a home.

-- A $47 million investment by Fannie Mae in targeted mortgage

revenue bonds (MRBs). Working in partnership with Governor

John Engler and the Michigan State Housing Development

Authority (MSHDA), Fannie Mae's investment helped 692 families

become homeowners for the first time with low down-payment,

low interest loans that included down payment assistance from

the state of Michigan and City of Detroit.

-- A continued commitment to safe, affordable multifamily

housing. Fannie Mae invested $50 million in multifamily MRBs

issued by the MSHDA, which to date has provided more than

$12.6 million in financing for five Detroit rental housing

developments that offer 367 affordable units for local

residents. The company also invested $2.2 million in the City

of Detroit through the Michigan Capital Fund for Housing to

leverage $11 million for senior and special needs housing.

Finally, Fannie Mae provided $2.58 million in permanent

financing for the renovation of the historic Addison Hotel

located in downtown Detroit. When completed, the Addison will

offer 40 one- and two-bedroom apartments within a mile of the

Cultural Center, Wayne State University, and Comerica Park.

In addition, Fannie Mae, in partnership with the City of Detroit, lenders, the Detroit Board of Realtors, and the nonprofit members of the Community Development Advocates, is succeeding in eliminating regulatory barriers to housing development. Fannie Mae helped draft the 10 Point Plan for Neighborhood Recovery with the input of the entire Detroit housing community. The plan seeks to identify and eliminate the major obstacles to rehabilitation and new housing construction. The recommendations made are being implemented and are beginning to make a difference. Initiatives underway include:

-- The Adjacent Vacant Lot Program, which targets Detroit

homeowners who live next to city-owned vacant lots. Fannie Mae

and the city's real estate division developed the initiative

to give residents the opportunity to buy the adjacent land for

only $50. The lot sales will mean an increase in area property

values and increased equity in properties that will help pay

for home repairs or other pressing needs. Since it began last

year, more than 1,700 families have taken advantage of the

program.

-- The repeal of a Detroit City law, thanks to the leadership of

City Council President Gil Hill, that made it possible to

legally purchase and rehabilitate abandoned property. Since

the enactment of a new law, more than 1,000 home buyers have

used the law to buy and rehabilitate formerly abandoned

properties.

-- New legislation signed by Governor Engler that makes it easier

for the City of Detroit to clear titles on its backlog of

tax-reverted properties. Fannie Mae spearheaded the new

legislation with the help of State Senator Bill Schuette, the

Governor, and local partners.

"The untold story of Detroit's recovery is in its neighborhoods," said David Dworkin, director of Fannie Mae's Detroit Partnership Office. "House by house, working families are seeing their personal wealth increase with rising home values, decreasing levels of violent crime, and increased homeownership among their neighbors and family members."

According to Dworkin, the company will continue working with local lenders to purchase low down payment loans, employer-assisted housing products, and other mortgages to increase affordable housing in Detroit.

Fannie Mae Foundation

The Fannie Mae Foundation knows the importance of homeownership and how over the course of time homeownership can revitalize a neighborhood and transform an entire community. Since 1994, the Foundation has been a partner with the City of Detroit and provided low- and moderate-income residents with affordable housing opportunities.

Through creative partnerships with nonprofit organizations in Detroit, the Fannie Mae Foundation has invested more than $1 million over the past four years in grants in response to the need for affordable homeownership opportunities. Each nonprofit has a unique and distinct mission on home-buyer education, counseling and affordable housing.

Throughout 1999, the Foundation has remained focused and committed to the building and revitalization of Detroit communities through the following investments:

-- University of Michigan received a two-year $200,000 grant as

part of the University-Community Partnership Program, to

support the Detroit Eastside Housing Initiative, increasing

housing production and rehabilitation capacity of nonprofits

in partnership with the Detroit Eastside Community

Collaborative;

-- New Hope Community Development Non-Profit Housing Corporation

received a $85,000 "Home Team" grant to produce two rehabbed

or newly constructed homes. The Home Team program is a

partnership between the Fannie Mae Foundation and Detroit

Pistons with the goal of revitalizing local neighborhoods and

providing free home-buying information to help Americans

achieve their dream of homeownership;

-- Local Initiatives Support Corporation was granted $40,000 to

assist nonprofit organizations plan and carry out development

projects in distressed neighborhoods; and

-- Bagley Housing Association received a $50,000 grant to support

the development of St. Anne's Gate Elderly Apartments,

providing 64 units of affordable rental housing for the

elderly in Southwest Detroit.

The Fannie Mae Foundation's efforts in 1999 have also addressed the community's unique needs:

-- University of Michigan School of Law received a two-year

$100,000 grant to support the Legal Assistance for Urban

Communities program in its effort to assist up to ten

nonprofit developers research the state of title on

developable land and outline a plan of action to clear title,

and assist with acquisition strategies to acquire land.

-- Positive Shades of Black received a $70,000 grant to develop

and carry out a financial literacy curriculum in 44 high

schools in the Detroit metropolitan area.

For more information and a list of local lenders participating in HouseDetroit, consumers may call Fannie Mae's Consumer Resource Center at 1-800-7FANNIE (1-800-732-6643), Monday through Friday, from 9:00 a.m. to 5:00 p.m. EDT.

The Fannie Mae Foundation creates affordable homeownership and housing opportunities through innovative partnerships and initiatives that transform and revitalize communities across America. The Foundation, a private nonprofit organization supported solely by Fannie Mae, is headquartered in Washington, D.C., and has regional offices in Atlanta, Chicago, Dallas, Pasadena and Philadelphia.

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. Over the past 31 years, Fannie Mae has provided nearly $2.8 trillion of mortgage financing for over 34 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Style Usage: Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae," and the company's stock is now listed on the NYSE as "Fannie Mae." In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."