WASHINGTON -- Some of the biggest names in banking and finance joined forces with community groups Tuesday to help 10,000 poor and moderate-income families in 50 cities buy homes.
The campaign, organized by the Neighborhood ReinvestmentCorp., aims to raise $650 million in contributions over the next five years.
The organization has already enlisted Chase Manhattan Bank, Chemical Bank, Citibank, Key Bank, and NationsBank -- each of which has committed $100,000.
In addition, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corp., State Farm Insurance, Allstate Insurance, and G.E. Capital Mortgage Insurance have joined the campaign.
The effort comes as the financial industry faces increasing pressure from regulators and politicians to step up reinvestment activity.
"This is a market largely missed by traditional lenders," said Federal Reserve Governor Lawrence B. Lindsey, chairman of the Neighborhood Reinvestment Corp.
Nicolas Retsinas, newly appointed federal housing commissioner, pledged the government's support. FHA's efforts to rewrite its underwriting standards and put its foreclosed properties to the productive uses could help, he said.
"There really is no more effective social program in this country than homeownership," Mr. Retsinas said.
The Neighborhood Reinvestment Corp., a congressionally-chartered, nonprofit corporation serves as a national network for community organizations committed to affordable housing.
The coalition will use funds contributed by lenders, insurance companies, other corporations, and foundations to support mortgages, down payments, closing fees, and renovation loans for homebuyers.
The network's community members also work as intermediaries with potential borrowers, helping prequalify them for bank loans and arranging financing to reduce down payments and closing costs. Participating lenders will be encouraged to offer flexible mortgage products.
The groups hope to counsel more than 75,000 people through the campaign. Twenty cities, including Los Angeles, New York, Chicago, and New Orleans, will initially be targeted. Thirty more will be added later this summer.