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FINANCE BOARD APPROVES FHLBANK OF BOSTON PROPOSAL TO LEND TO NON-MEMBER MORTGAGEE

 WASHINGTON, May 26 /PRNewswire/ -- The Federal Housing Finance Board today approved a proposal by the Federal Home Loan Bank of Boston to establish a $25 million line of credit for the Massachusetts Housing Finance Agency (MHFA), a mortgage lender that is not a member of the Federal Home Loan Bank System (Bank System).
 The Finance Board granted the special approval at its monthly meeting after determining that the MHFA's proposed lending program is consistent with the FHLBanks' mission to provide housing finance and meets statutory and regulatory requirements. The MHFA plans to use the advances to fund multifamily housing programs for low-income families, elderly people, and mentally disabled individuals, and to convert foreclosed properties to affordable housing.
 "The Massachusetts Housing Finance Agency is an ideal candidate for approval to use Bank System advances," said Finance Board Chairman Daniel F. Evans Jr. "These funds will help provide affordable housing for segments of the population that are most in need."
 The MHFA proposal is the result of a commitment by the board of directors of the FHLBank of Boston to lend up to $500 million to state housing finance agencies in New England.
 The MHFA plans to use the advances to fund the following multifamily housing programs:
 -- Elder CHOICE, which will provide financing for assisted-living developments for elderly people who do not require placement in nursing homes, but require limited assistance with daily activities;
 -- The Options for Independence Program, which will provide financing to develop community residences for mentally ill and mentally retarded individuals;
 -- The existing 80/20 Program, which provides financing for affordable rental housing developments in which a minimum of 20 percent of the units are occupied by low-income residents; and
 -- REACH, which will provide financing to convert real estate owned by commercial banks, the Resolution Trust Corporation (RTC), and the Federal Deposit Insurance Corporation (FDIC) to affordable housing.
 Section 10b of the Federal Home Loan Bank Act permits FHLBanks to make advances to non-members that are HUD-approved mortgagees. The non- member mortgagee must be chartered under law, be subject to the supervision of a governmental agency, and must lend its own funds as its principal activity in the mortgage field. The MHFA meets all of these requirements.
 Today's action marks only the fourth time that the Finance Board has granted such permission. Previously, proposals involving state-chartered agencies in Colorado, New Mexico, and Rhode Island were approved by the Finance Board.
 -0- 5/26/93
 /CONTACT: Chuck Chamness, 202-408-2986, or Bill Glavin, 202-408-2546, both of the Federal Housing Finance Board/


CO: Federal Housing Finance Board; Federal Home Loan Bank of Boston ST: District of Columbia, Massachusetts IN: FIN SU:

MH-DC -- DC011 -- 2428 05/26/93 11:53 EDT
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Date:May 26, 1993
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