WASHINGTON -- An organization of financial institutions dedicated to community development has singled out six successful projects from across the country as models for improving at-risk neighborhoods.

Social Compact -- a two-year-old group of 300 banks, thrifts, insurance companies, mortgagers, and trade groups -- honored these projects last week at its annual awards dinner.

Each project involved a partnership between a financial institution and a community group to improve an undeserved area. The projects ranged from the creation of a parent-child center for low-income families in Washington, D.C., to the revitalization of a small, Hispanic neighborhood in Whittier, Calif.

"We lead by example and promote what works," said Leland S. Prussia, chairman of the organization and former chairman of BankAmerica Corp. "The message is clear: Community reinvestment is a concern of all types of financial institutions."

Ingredients in Success

Members of the Social Compact highlighted five common elements in establishing successful community partnerships:

* A strong, highly visible community need.

* Community and charitable support.

* Effective government subsidy programs help support the projects.

* Clearly demonstrated, mutual benefit to both partners.

* And strongly committed lenders with senior executive personal involvement.

The six winning partnerships follow:

Chicago Neighborhood Housing Services and Continental Bank, Chicago.

The two have worked together for more than five years to revitalize low and moderate income Chicago neighborhoods, by providing affordable home improvement loans. The program has injected $17 million into the area, with more than 1,000 loans enabling the rehabilitation of nearly 2,000 affordable-housing units.

Chicago Neighborhood Housing Services administers the program, handling all loan collection and servicing, and offering rehabilitation consultation. Continental Bank supports the effort financially, first committing $20 million to the revolving loan fund in 1987. The bank also contributes $40,000 annually to underwrite the nonprofit's activities.

City Light Development Corp. and First National Bank, Strasburg, Va.

The partners are rehabilitating and building six housing units in one of the poorest neighborhoods of Winchester, Va. Families with incomes as low as $7,400 will be able to rent the homes for $185 per month.

First National Bank has invested $206,000 in projects undertaken by City Light and has provided construction and permanent market-rate loans totaling $500,000. The bank's CEO sits on the nonprofit's board and is president of its community development corporation. It has approved the construction financing for the project and will provide financing for the individual equity investors.

The program relies upon collaboration from a number of local groups and companies. The Amoco Foam Products Company has agreed to provide all of the required labor to build the new duplex units, and two other Amoco subsidiaries with contribute furnishings and heating oil.

The Edward C. Mazique Parent Child Center, Washington, D.C., and Aetna.

The center, which provides "one-stop" child and family services for 600 low-income families each year, is one of the original 36 centers that evolved out of President Johnson's War on Poverty. The partnership enabled the center to open a state-of-the-art facility last year with capacity for 160 children, a kitchen, health care unit and expanded space for care of 50 families with children.

The new building was conceived in 1988, but stalled in 1989 when the bank that had provided construction financing was declared insolvent. After the city government helped secure new financing, Aetna stepped in to provide a long-term financing commitment. It helped restructure the center's loan repayment and found another lender to share in providing $1.4 million, 15-year financing.

Aetna also helped the center forestall foreclosure by the FDIC and allowed it negotiate a reduction of $600,000 from the original loan obligation.

Elmwood Neighborhood Housing Services and Citizens Bank, Providence, R.I.

The two organizations have worked together since 1992 to support a program based on third-world lending practices, organizing individuals who want to become small-business owners into small "peer groups" to finance the projects. Members select loan recipients from their group and jointly guarantee the loans, which range from $300 to $10,000.

Funds for loans are passed through the nonprofit, which also provides outreach, orientation, training and certification of the peer groups. Citizens Bank approved an unsecured $25,000 line of credit to the nonprofit for lending to the entrepreneurs and a three-year $45,000 grant for operational support.

Good News Housing/Community Land Trust Inc., and Citizens Bank, Providence R.I.

The two have helped revitalize Providence's South Side through a project to develop affordable housing, called Venceremos, or "We shall overcome." The nonprofit was the first organization in the state to use the community land trust model, where housing is taken off the market and held in trust for use by low and moderate-income families.

In 1992, Citizens Bank provided $265,299 in construction and blanket permanent mortgage loans for the development. Since 1988, the bank has also approved more than $1 million in below-market mortgages to the group. In addition, it has provided legal assistance, donated foreclosed property and funded training for housing recipients.

La Habra Neighborhood Housing Services and Quaker City Federal Savings and Loan Association, LaHabra, Calif.

The two organizations have been partners for more than 16 years, providing support and assistance for low-income home-buyers. Recently, they forestalled a city plan to bulldoze a Hispanic neighborhood in Whittier and construct a large housing project.

J.L. Thomas, president and CEO of Quaker City Federal Savings & Loan Association, Whittier, Calif., convinced the city leaders to work with the nonprofit and community to come up with an alternative revitalization plan.

He pledged and provided 100% purchase price financing of land in the neighborhood and provides annual financial support, below market rates special programs for low-income and first-time home buyers. In all, it has provided the housing group $5 million in loans and commitments.

La Habra Neighborhood Housing Services has now purchased five properties in the neighborhood and plans to build a nine-unit townhouse project for first-time home buyers.

Keys to Success

The award-winning projects shared common elements: * They all addressed a highly visible community need. * They sought out community groups or charitable organizations as partners. * Government subsidies were secured to help bankroll the projects. * The partners derived mutual benefits.

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