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FANNIE MAE TO PURCHASE $55 MILLION IN MORTGAGES FROM MIDDLE-INCOME HOUSING LOAN PROGRAM; ST. PAUL AND MINNEAPOLIS FAMILIES SHARE SUCCESSFUL EXPERIENCES

 MINNEAPOLIS/ST. PAUL, March 22 /PRNewswire/ -- The Minneapolis and Saint Paul Middle-Income Housing Loan Programs received a boost today when Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) announced that it has agreed to purchase $55 million in loans originated through the programs.
 At a press conference at one of the homes purchased and rehabilitated through the Minneapolis program, Representative Bruce Vento said: "I applaud the efforts of the Saint Paul and Minneapolis housing agencies for developing these initiatives, which provide hardworking, middle-income Minnesota families an opportunity to have a stake in their community. Fannie Mae's partnership with our cities is a welcome initiative leading to the success and continuation of these programs."
 The Middle-Income Housing Loan Programs are geared toward helping more than 700 middle-income families purchase and/or rehabilitate homes in urban areas of Minneapolis and Saint Paul. However, each program is unique to the needs of the individual cities.
 Since February 1992, the Saint Paul Department of Planning and Economic Development (PED) has initiated more than $9.7 million in lending activity through mortgage financing for the purchase of a home; purchase and improvement of a home; refinancing and home improvement; or, second mortgage options for home improvement.
 Eight participating lenders will originate another $15.5 million in loans through the program.
 Saint Paul's PED plays three roles in operating the Middle-Income Loan Program. It facilitates the issuance of bonds by the City to finance the program; it is a lender for refinancing and home improvement loans; and it administers the program. Fannie Mae will purchase the loans originated under Saint Paul's program.
 In September of 1992, the Minneapolis Community Development Agency (MCDA) began offering its Middle-Income Housing Program to residents earning up to $89,250.
 The $30 million Minneapolis initiative also includes refinancing and rehabilitation components. The program has a "deferred" loan for 2 percent of the mortgage amount on a new loan and up to 5 percent on a loan that includes rehabilitation.
 Norwest Mortgage and FBS Mortgage are participating lenders in the Minneapolis initiative. Fannie Mae will also purchase the loans originated through this program.
 "Affordable homes for working families are one of the essential building blocks for a successful city. This program will give more middle-income families better access to homes in the heart of the city and closer to jobs, schools, and other essential services," said Representative Martin Olav Sabo.
 "The Saint Paul and Minneapolis Middle-Income Housing Loan Programs are examples of how successful public-private partnerships benefit cities around the country, which are working to build stable neighborhoods with decent and affordable housing," said John R. Hayes, senior vice president for Fannie Mae's midwestern regional office. "Fannie Mae applauds Representatives Vento and Sabo, MCDA, PED, and the local lenders for their commitment to making these programs a success and for setting an example for others."
 "The Middle-Income Housing Loan Program is critical to attracting and keeping middle-income residents in our larger cities. These home buyers and homeowners often fall through the cracks in other financing programs because their incomes are too high. But they need assistance to buy and fix their homes and we need them in our cities for the strength and success of our neighborhoods," explained Jay Jensen, executive director of the MCDA.
 "Middle-income families that want to live in the city should be able to do so without undue financial hardship," said Ken Peterson, director of Saint Paul Planning and Economic Development. "With the strong support of companies like Fannie Mae, we've been able to offer incentives to our current and new homeowners. Because the response has been so positive, we're looking for a second phase of funding to begin next fall."
 Fannie Mae, the USA's Housing Partner, is a congressionally- chartered, shareholder-owned company and the nation's largest investor in home mortgages.
 -0- 3/22/93
 /CONTACT: Janice Daue of Fannie Mae, 202-752-3421; Carol Allis of the Minneapolis Community Development Agency, 612-673-5042; or, Sue Hurley of Saint Paul PED, 612-228-3208/
 (FNM)


CO: Federal National Mortgage Association; Minneapolis Community
 Development Agency; Saint Paul Department of Planning and
 Economic Development ST: Minnesota IN: FIN SU:


IH-KD -- DC013 -- 8249 03/22/93 12:26 EST
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Date:Mar 22, 1993
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