ATLANTA -- Capping a three-year effort, a Miami-area housing authority finally received state permission this week to open up a savings bank.

If the Dade County, Fla., Housing Finance Authority now wins approval from the Federal Deposit Insurance Corp., it would become the first housing agency in the nation to operate its own bank, authority chairman Milton Wallace said yesterday in an interview.

"State approval takes us a big step forward toward realizing what we consider to be a very timely idea," Wallace said.

Under the state charter approved Tuesday by Florida Comptroller Gerald Lewis, the housing authority's bank would be permitted to set up savings accounts, underwrite home mortgages, and sell mortgage-backed securities, he Wallace said.

Because the authority does not want the proposed Dade County Housing Finance Authority Savings Bank to be perceived as competing with commercial banks, the authority did not seek approval to offer checking accounts, he said.

Wallace said that the mortgages would be targeted at low- and middle-income clients. The loans would be bundled into securities targeted at large institutional buyers.

"I call the mortgage-backed securities we would offer conscience bonds," he said. "They would allow us to continuously recycle our deposits back into home loans for people that most banks are simply not serving now."

The bank would target its loans to borrowers earning less than 80% of the median county income, Wallace said. Loans would be approved to finance purchase of homes costing less than 80% of the county median price.

The authority chairman said that the bank would rely on start-up deposits of $11 million transferred from the housing authority's reserves of about $16 million. Wallace said he has also been soliciting investments of up $100,000 a piece from area banks, corporations, local governmental units, and individuals. The $100,000 figure was chosen because that is the ceiling on deposits covered by FDIC insurance.

The certificates of deposit offered would carry a lower-than-market interest rate, Wallace said.

"Our pitch to investors will be that here is a real chance to help the community," he said.

Patricia Braynon, the authority's executive director, said that the bank's headquarters would be located in the authority's building. The bank would initially open as many as four "storefront" offices in the Miami area, staffed with between two and three people.

"Our idea is to have a presence in the community we want to serve," Braynon said.

Braynon said that when final approval is received, a separate board of directors chosen for the new bank will hire a president and chief operating officer. Those officials will then hire loan officers and other staffers.

State approval of the savings bank concept comes after a long effort by authority officials to gain the necessary approvals.

After Dade County commissioners in 1989 endorsed a plan to set up the bank, authority officials ran into a snag when they first sought approval from the state comptroller in 1990.

That August, Lewis said he could not endorse the proposed thrift because state law did not specifically provide for such an institution. Lewis based his stance on an opinion provided by state Attorney General Robert A. Butterworth.

Authority officials then took their campaign for a savings bank to the state Legislature. Last year, a bill permitting creation of the bank finally became law, but only after lawmakers overrode Gov. Lawton Chiles' veto, according to Wallace.

John Murphy, executive director of the Association of Local Housing Finance Agencies, said yesterday said that the authority's push to set up a savings bank sets a welcome example for housing agencies elsewhere.

"It's a real trail-blazing move on the part of the housing authority, and I'm very pleased it received state approval," Murphy said. "We will be actively promoting the concept."

Murphy said he was not aware of a precedent for a housing authority setting up a bank.

FDIC officials could not be reached for comment yesterday on the authority's pending application.

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