FleetBoston Financial Corp. and Fannie Mae announced last week that they have begun a $2.5 billion partnership to foster affordable-housing and community development projects in the Northeast.
They said FleetBoston will originate $2.5 billion of mortgages to low- and moderate-income borrowers in the next five years and that Fannie has agreed to buy the loans.
FleetBoston plans to offer loans in Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Maine, New Hampshire, and parts of southern Florida. They will include mortgages with a 3% down payment; for home rehabilitation; especially for women; in which the borrower's employer helps with the down payment, closing costs, and interest rate reductions; and for low- and moderate-income borrowers in rural areas.
The companies said an additional $627 million will be allocated to affordable-housing projects to be run in cooperation with public and private partners.
Those funds are to be used for construction and to invest in equity, debt, and subordinate debt. The allocation would also be tapped for loans in cities where Fannie has partnership offices; for multifamily housing loans; and to finance Community Development Trust, a hybrid real estate investment trust that is to invest in and securitize mortgage loans on properties eligible under the Community Reinvestment Act.
Fannie Mae also announced plans to invest $18 billion in affordable-housing projects in New Jersey over the next five years, saying the program is expected to help 180,000 families. It has opened a partnership office in Newark and named as its director Tim Touhey, who had been executive director of the New Jersey Housing Mortgage and Finance Agency.