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OAKLAND MAYOR AND FANNIE MAE SET $1 BILLION, FIVE-YEAR INVESTMENT GOAL FOR AFFORDABLE HOUSING

 OAKLAND, Calif., July 14 /PRNewswire/ -- Mayor Elihu M. Harris and the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) announced today a comprehensive investment strategy to finance $1 billion in affordable housing in Oakland over the next five years.
 The joint venture, entitled HouseOakland, is the pilot project of a broader effort for central city lending that Fannie Mae plans to carry out in U.S. cities over the next few years. HouseOakland is a direct result of intensive efforts by a coalition of city officials, led by Harris, and community members to develop increased affordable homeownership and rental housing opportunities for Oakland residents.
 HouseOakland, which relies on the active participation of the lending community, is expected to help finance the purchase, construction, or rehabilitation of more than 10,000 units of single- family and multifamily housing for the city's low-, moderate-, and middle-income residents.
 "This is a solid achievement in our long-range goal to create a city of strong neighborhoods with vital commercial and residential investment," said Harris. "This partnership should provide the minority community in Oakland the opportunity for equity, ownership, and personal investment in our neighborhoods."
 According to James A. Johnson, Fannie Mae's chairman and chief executive officer, "The partnership will be a catalyst for a broad range of neighborhood revitalization efforts." Johnson said the principal goals of HouseOakland are to:
 -- Improve the affordability and availability of single-family
 housing finance for Oakland residents.
 -- Increase lending for the rehabilitation of an aging housing stock
 in the city.
 -- Promote greater lending and investment in affordable multifamily
 rental housing.
 -- Assist in outreach activities that enable low- and moderate-
 income families to take advantage of homeownership programs.
 "In Oakland, and in the central city initiatives that we will do around the country over the next few years, Fannie Mae will tailor programs to respond to the community's specific needs and effectively leverage scarce resources for housing," said Johnson.
 "We want to break down every barrier that stands in the way of doing as much business as possible in the central city of Oakland and its low- and moderate-income communities," Johnson said.
 The public/private partnership among the city, Fannie Mae, and the lending community created by the HouseOakland plan is needed to meet the housing problems Oakland is facing. Much of Oakland's housing stock is in older buildings; overall, almost 70 percent of the housing units in Oakland were built before 1959, he said. The great need for rehabilitating these units is illustrated by the fact that approximately 8,000 households in Oakland live in inadequate or substandard housing.
 Compounding these problems are two major disasters that destroyed a significant portion of Oakland's housing market. The 1989 Loma Prieta earthquake destroyed or damaged 1,200 residential hotel units which served Oakland's very low-income population. In addition, the 1991 Oakland/Berkeley fire storm destroyed 3,500 housing units in Oakland.
 To address these problems, Oakland has produced major accomplishments to enhance, preserve its housing stock through a variety of programs.
 Since 1975, through various initiatives including the issuance of tax-exempt bonds, the city has provided more than $210 million in financing for the construction and rehabilitation of over 11,000 units of single-family and multifamily housing units and residential hotel developments.
 In addition, the city created the Community Alliance for Syndicated Housing, (CASH) Inc., which has raised approximately $10 million with its first two partnerships for equity investments in low-income rental housing. CASH, Inc. anticipates raising close to $12 million with its third partnership.
 Harris noted that Fannie Mae has embarked on one of the most exciting housing initiatives in recent memory. "Recognizing the need to reinvest in inner cities, Fannie Mae made the commitment to devote billions of dollars to help rebuild America's cities," he said. "We are proud and excited to be at the forefront of a new homeownership initiative. With the commitment and dedication of Fannie Mae, the City, and the lending community, we will strive to meet the housing needs of all Oakland residents."
 HouseOakland will use Fannie Mae's existing standard single-family and multifamily mortgage products and current Community Lending programs, along with special initiatives tailored to Oakland's unique housing needs, including emphasis on rehabilitating existing housing. Eligible products include:
 -- The Community Home Buyer's Program (CHBP) with the 3/2 Option
 that allows families with incomes of up to 120 with as little as
 3 percent of their own funds.
 -- FannieNeighbors, which requires down payments of as little as 5
 percent, has flexible qualifying requirements, and requires less
 cash for closing costs than standard mortgage programs.
 -- The Mortgage Revenue Bond Credit Enhancement program, in which
 Fannie Mae works with local and state government housing finance
 agencies to reduce the costs of financing housing through the
 issuance of bonds.
 -- The "HomeStyle" mortgage plan and Community Home Improvement
 Mortgage Loans, both of which are used to finance home
 improvement for home buyers and/or owners.
 -- FHA-insured rehabilitation loans.
 -- Equity commitments to CASH, Inc., provided the Low Income Housing
 Tax Credit is reauthorized by Congress.
 -- Various multifamily products and services.
 The plan provides that the City of Oakland will identify three to six specific geographic areas within the city with predominately low- and moderate-income households for special promotion and targeting of HouseOakland. In addition, the City will:
 -- Seek to provide a total of $10 million over five years for down
 payment, second mortgage assistance, and a deferred loan program
 to support the CHBP with the 3/2 option, all for first-time, low-
 and moderate-income home buyers.
 -- Seek to fund a total of $15 million over five years for the
 City's Home Maintenance and Improvement Program, with provides
 funds for the rehabilitation of owner-occupied homes.
 -- Work closely which Fannie Mae and its lenders to achieve the
 overall goals of HouseOakland including the provision of housing
 counseling for low- and moderate-income first-time home buyers.
 Fannie Mae and the City of Oakland will jointly promote HouseOakland to lenders, insurers, real estate agencies, non-profit organizations, and consumers through forums, community publications, home buyer education, and consumer media.
 Fannie Mae is a congressionally chartered, shareholder-owned company and the nation's largest source of home mortgage funds.
 -0- 7/14/93
 /CONTACT: Crystal Page of the City of Oakland, 510-238-3141, or Gene Eisman of Fannie Mae, 202-752-6673/
 (FNM)


CO: Fannie Mae ST: California IN: FIN SU:

TW -- DC023 -- 0246 07/14/93 14:19 EDT
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Date:Jul 14, 1993
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