WASHINGTON - Fannie Mae will invest in a $50 million loan commitment made by Residential Funding Corp. to finance more than 1,550 affordable single-family homes throughout California.
The loan is to a development partnership that includes the California Public Employees Retirement System, known as Calpers, and Hearthstone Advisors. Calpers is one of the largest public pension funds in the nation, with some $70 billion in assets.
Greg Schultz, executive vice president of Minneapolis-based RFC, said: "The home building industry in the United States has been devastated by the withdrawal of banks and savings and loans, and we are pleased with the opportunity to be able to provide credit facilities to the home building industry."
The loan will finance new single-family home developments in California intended primarily for first-time and second-time homebuyers.
The funds can be used to build homes with a sales price that will allow for a mortgage that does not exceed Fannie Mae's 1993 limit of $203,150.
Fannie Mae will purchase from RFC, the lead agent, a 50% interest, up to $25 million. The pilot program, developed with the assistance of the National Association of Home Builders, helps provide lenders a secondary-market outlet, through Fannie Mae's investment, for loans to builders.