A program designed to finance $2.5 billion worth of low-income housing by 2002 has entered its second year, with growing participation by banks and mortgage lenders.
The congressionally funded Neighborhood Reinvestment Corp. is tapping lenders for its NeighborWorks Home Ownership 2002 program, which aims to fund the purchase of 25,000 housing units for people with low or moderate incomes.
The program also makes rehabilitation loans - and helps depository institutions meet their Community Reinvestment Act obligations. Only one of the 116 participating companies is just a mortgage bank, and therefore exempt from CRA requirements.
The corporation serves many not-for-profit housing groups, providing charters and resources to each. One is Neighborhood Housing Services of New York City, whose board president, Al Sofia, is a Citigroup vice president.
Elizabeth Garza is the Citigroup community investment officer in charge of the company's involvement with NeighborWorks. Citi appreciates "the opportunity to lend to folks you know are going to be guided through the process," Ms. Garza said.
NeighborWorks provides pre- and post-purchase counseling to borrowers, partly through a "HomeBuyer's Club" financial seminar program. Food banks, neighborhood leadership training, and adult education are also provided.
Also, to help people who take out NeighborWorks rehab loans Neighborhood Housing Services acts as a project manager, Ms. Garza pointed out,
The New York organization has 26 partnerships with financial institutions in the city, the region, and farther afield. The partners include Allstate Insurance Co., Bank of America, Fannie Mae, Freddie Mac, Fleet Bank, Chase Manhattan Bank, Citigroup, Emigrant Savings Bank, and Nationwide Insurance Enterprise.
In four and a half years, NeighborWorks 2002 and the preceding NeighborWorks program have helped 12,466 people become homeowners. The programs have financed the purchase of 14,221 housing units and counseled 88,402 individuals.
The median income for participating families is $24,972, 36% below the national median, the Neighborhood Reinvestment Corp. said. Sixty-seven percent have low or very low incomes, and 26% moderate incomes.