Fannie Mae Announces Seven-Year, $55 Billion 'HouseChicago' Investment Plan to Finance Affordable Housing for 500,000 Chicago Families.

Business Editors

CHICAGO--(BUSINESS WIRE)--May 15, 2001

Single Largest Housing Investment in the History of the City

Fannie Mae (NYSE:FNM
FNM Free National Movement (Bahamas)
FNM Foot and Mouth ), the nation's largest source of financing for home mortgages and multifamily housing, today announced a new and expanded "HouseChicago" seven-year, $55 billion investment plan to finance affordable housing for 500,000 Chicagoland area families.

Mayor Richard M. Daley, U.S. Representative Bobby Rush (D-IL), Alderman Arenda Troutman (20th Ward), Rick Daniel of the W.N. Daniel Foundation, Inc. and Reverend Gerald Dew of Antioch Missionary Baptist Church joined local housing partners and Jamie Gorelick, vice chair of Fannie Mae, for today's announcement.

HouseChicago is the largest single housing investment in the city's history and the largest investment made by Fannie Mae through a Partnership Office.

The announcement was made at Antioch Homes II in Englewood, the groundbreaking site of 57 new affordable apartments made possible through Fannie Mae's $3.9 million investment in the property that qualifies for the federal Low Income Housing Tax Credit program.

"Antioch Homes II is a strong example of our continued commitment to neighborhoods throughout Chicago. We're excited to expand our efforts to help more families find affordable housing in the city," said Fannie Mae's Gorelick. "Together with our partners, we have created an expanded plan that will allow us to address the unique housing needs of the entire Chicago area. We're building on our work with many of our partners and working with the people who best understand local housing needs to stretch our business goals and help more families."

"Today's commitment by Fannie Mae to invest $55 billion in Chicago is unprecedented. It is great news for families throughout the neighborhoods of our city," said Mayor Daley. "Owning a home is part of the American dream as well as key to revitalizing our neighborhoods and improving our communities and schools. Fannie Mae has been a longstanding partner to the city, local lenders, nonprofits, and the housing industry in creating homeownership and affordable housing opportunities that truly make a difference in peoples' lives."

"Homeownership represents the easiest way for America's families to create personal wealth and serves as the cornerstone of economic security," said Rep. Rush. "With Fannie Mae's investment plan and expansion in our area, combined with other affordable-housing initiatives in Chicago, we can continue our progress toward meeting our housing needs, rejuvenating our neighborhoods, and strengthening our communities."

As part of the $55 billion HouseChicago announcement Fannie Mae highlighted the company's commitment to neighborhood revitalization through the new construction of Antioch II, affordable apartment units being built in Englewood.

The new $7.4 million development spans a three block area from 63rd Street to 66th Street along Normal Avenue, and was made possible through a partnership between Illinois Housing Development Authority, Harris Bank, Apollo Housing Capital LLC, Antioch Baptist Church Foundation, and Fannie Mae. Antioch II includes 57 rental townhouses, 24 two-bedroom and 33 three-bedroom.

The apartments range in size from 1000 square feet to 1,300 square feet and are extremely affordable. Rents will start as low as $189 a month.

"The Antioch Homes II development is a symbol of the continued effort by the Antioch Missionary Baptist Church to create affordable housing opportunities for the residents of Englewood," said Rev. Dew. "I am honored to celebrate this partnership and committed to furthering the vision of the late Pastor Wilbur N. Daniel."

The Antioch Missionary Baptist Church has been a pillar in the Englewood Community of Chicago for over 40 years. In addition to providing religious and social services, the church group has been instrumental in the development of affordable housing in the Englewood community.

In addition to Antioch Homes II and the financial commitments announced today, several key Fannie Mae initiatives underway in Chicago were highlighted, including:

-- Affordable Rental Housing. Recognizing that not every family is ready for
homeownership, affordable rental housing is a critical housing issue in
Chicago. Fannie Mae has invested more than $817 million in multifamily
properties throughout the city, providing safe, affordable housing for nearly
32,000 families. Fannie Mae will continue to support rental housing in the
single-family stock by significantly increasing its financing for
owner-occupied, 2-4 unit properties over the next seven years. Fannie
Mae's new Community 2-Family(SM) and Community 3-4 Family(SM) are now
available in Chicago and offer higher qualifying ratios with very low down
payments.

-- Anti-Predatory Lending Experiment. Fannie Mae worked closely with the Legal
Assistance Foundation of Chicago and the Northwest Neighborhood Federation to
make available a $5 million anti-predatory refinance initiative to help Chicago
families refinance very high interest rate loans to save their homes from
foreclosure and preserve home equity.

-- The City of Chicago/Allstate Home Improvement Program. With more than 73
percent of the City's housing stock built before 1953, and more than $300
million spent on home renovations each year, Fannie Mae joined the City of
Chicago, Allstate and Countrywide to bring a below-market rate (6.5 percent)
rehabilitation mortgage product with flexible underwriting terms to communities
throughout the City.

-- Location Efficient Mortgage(cm) (LEM(cm)). Chicago is among the first
regions in the United States to have access to the LEM, a mortgage initiative
tailored to encourage homeownership by linking the region's housing and
public transportation resources. The LEM is designed for home buyers who
purchase a home in a densely populated community that has efficient public
transportation, and allows a portion of the buyer's potential savings on
transportation to be considered as additional borrower income in qualifying for
a mortgage. That potential savings, called the Location Efficient Value, is
calculated by a computerized mapping tool developed by the Center for
Neighborhood Technology, a nonprofit organization based in Chicago that
promotes ecological, economic, and community development initiatives. The LEM
has no income limits and offers more flexibility than standard mortgage
financing, including low down payment requirements.

-- Welcome Initiative. Through the Welcome Initiative, Fannie Mae's first
comprehensive effort to serve the entire immigrant community, the company
offers new underwriting flexibilities through its lender partners that allow
immigrant borrowers to apply for a home loan even if they are only in the
process of obtaining a green card, or do not have a complete U.S. income and
credit history. Fannie Mae will consider alternative sources of qualifying
income such as boarder income and part-time employment.

-- Multicultural Homeownership Initiative. Fannie Mae's multicultural
homeownership initiative is designed to provide our lender partners with tools,
services and strategy development to assist them in reaching out to
multicultural communities. Fannie Mae has committed to work with selected
lenders, community developers, counseling agencies, churches, real estate
professionals, and key housing advocates to close the homeownership gap between
minorities and non-minorities by supporting minority and immigrant borrowers
who are on the path to owning a home.

In 1995, Fannie Mae and the City of Chicago created "HouseChicago," a commitment by Fannie Mae to provide $10 billion in financing over seven years and to increase homeownership and rental housing opportunities for more than 125,000 families.

In June 1998 Fannie Mae expanded the plan to a ten-year $12 billion commitment, at the request of the City of Chicago, to coincide with the city's five-year $1.2 billion affordable housing plan.

Since "HouseChicago" first was launched, 42 percent of the mortgage loans Fannie Mae has purchased from lenders went to first-time home buyers, 43 percent to minority home buyers and 62 percent went to low- and moderate-income borrowers. Today's announcement represents the expansion of Fannie Mae's commitment to the entire six-county Chicagoland area.

For more information on HouseChicago or a list of local participating lenders, consumers may call Fannie Mae's Consumer Resource Center at 1-800-7FANNIE (1-800-732-6643) between 8:00 a.m. and 4:00 p.m. CDT.

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 $3.0 trillion of mortgage financing for 37 million families.

More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Community 2-Family and Community 3-4 Family are service marks of Fannie Mae. Unauthorized use of these marks are prohibited.

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."

Location Efficient Mortgage is a certification mark owned by the Institute for Location Efficiency, a California nonprofit organization. Unauthorized use of this mark is prohibited.