Fleet Financial Group is launching mortgage programs with a big piece of the $207.5 million it is committing to Connecticut.

The financial commitment - which ended the state's threatened antitrust action over Fleet's planned merger with Shawmut National Corp. - will help finance residences in urban neighborhoods and allow workers to buy homes near their jobs.

In striking the deal with Fleet, "our primary concern was guaranteeing that the new banking giant did not abandon the ordinary consumer, like the homebuyer who needs a mortgage," said Richard Blumenthal, Connecticut's attorney general.

Mr. Blumenthal's office had been threatening to act against Fleet and Shawmut, a move that would complicate the banks' effort to have the merger approved by the Federal Reserve Board.

Executives from Fleet say Connecticut was in no danger of losing a longtime ally. Fleet and Shawmut have committed more than $1 billion to affordable housing and economic development in the state over the past three years.

The new money, which comes on top of ongoing funding for community development, "gives us more momentum," said Michael S. Zbailey, senior vice president of Fleet's Connecticut bank.

The bank worked with the state to determine what new programs should be funded and what existing initiatives should be beefed up, Mr. Zbailey said.

"You determine what makes each program work, what costs are reasonable, and then you add it up," he said of the negotiations.

Mortgage availability was one issue that both sides felt strongly about, Mr. Zbailey said. "Homeownership is critical for the revitalization of the cities."

To make some of Connecticut's big cities more appealing, Fleet will commit $25 million for a new fund to provide single family and multifamily housing. The program will fund purchases and revitalizations of abandoned residences in older cities like Hartford, New Haven, and Bridgeport.

The fund will also provide an entry for Fleet mortgage products that are tailored to lower-income borrowers.

In another residential initiative, Fleet agreed to commit $37.5 million to set up a lease/purchase housing program that can allow residents to live near the communities where they work.

The program, in which residents rent a home for two years and then take out a mortgage without a down payment, is designed for middle-income borrowers like teachers, firefighters, and police officers.

Fleet executives say they are confident the new programs will fill necessary niches. "Some of this stuff is uncharted," Mr. Zbailey said. "But we think we have the way to do it right and to do it well."

In a more traditional vein, Fleet is purchasing $50 million in Connecticut housing authority bonds that will fund low-income and moderate- income housing.

Fleet also agreed to provide the following for business development projects:

*$90 million in loans to small and medium-size companies through the Connecticut Development Authority.

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