NATIONAL CREDIT ENHANCEMENT/FINANCING PROGRAMS AFFORDABLE HOUSING

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1 NATIONAL CREDIT ENHANCEMENT/FINANCING S AFFORDABLE HOUSING ORGANIZATION AND FANNIE MAE Community 100 Purchase money transactions or nocash-out refinances on one-unit properties, including approved condominiums, PUDs, and manufactured housing units (but excluding cooperatives). Eligible to borrowers with incomes up to 100% of area median income (higher in designated "high-cost areas") and unrestricted in central cities and other "FannieNeighbors" areas. A maximum 100% loan-to-value (LTV) first mortgage, designed for borrowers with good credit. Permits flexible sources for a 3% borrower contribution and a single qualifying ratio of 41%. Permits combined loan-to-value (CLTV) of 105% with eligible sources of down-payment and/or closing-cost assistance involved. Fannie Mae-approved lenders originate first mortgages at market rates that are purchased for cash for securitization by Fannie Mae. Ability to use these program options requires specific additional contract language and approval. Edward J. Dodson Senior Affordable Housing Business Manager Fannie Mae 1900 Market Street, Suite 800 Philadelphia, PA (215) (215) (fax) edward_dodson@fanniemae.com Web Site: Community 100 Plus Same as Community 100. A maximum 100% LTV first mortgage, designed for borrowers with good credit. Permits lesser of 1% or $500 borrower contribution and a single qualifying ratio of 41%. Permits CLTV of 105% with eligible sources of down-payment and/or closing-cost assistance involved. Community Solutions 100 Same as Community 100 but restricted to classroom teachers, administrators, and other full-time employees of an educational agency or institution. A maximum 100% LTV first mortgage, designed for borrowers with good credit. Permits lesser of 1% or $500 borrower contribution and a single qualifying ratio of 45%. Permits CLTV of 105% with eligible sources of down-payment and/or closing-cost assistance involved.

2 NATIONAL CREDIT ENHANCEMENT/FINANCING S AFFORDABLE HOUSING ORGANIZATION AND FANNIE MAE Community 2-Family Purchase money transactions or nocash-out refinances on two-unit properties. Eligible to borrowers with incomes up to 100% of area median income (higher in designated "high cost areas") and unrestricted in central cities and other "FannieNeighbors" areas. A maximum 95% LTV first mortgage, designed for borrowers with good credit. Requires 3% from the borrower's own funds and permits 2% from flexible sources. Maximum qualifying ratios of 35/43 apply. Permits a CLTV of 105% with eligible sources of down payment and/or closingcost assistance involved. Landlord counseling required. Fannie Mae-approved lenders originate first mortgages at market rates that are purchased for cash for securitization by Fannie Mae. Ability to use these program options requires specific additional contract language and approval. Edward J. Dodson Senior Affordable Housing Business Manager Fannie Mae 1900 Market Street, Suite 800 Philadelphia, PA (215) (215) (fax) edward_dodson@fanniemae.com Web Site: FEDERAL HOME LOAN BANK OF PITTSBURGH Affordable Housing Program (AHP) Community Lending Program (CLP) Finance the purchase, construction, and/or rehabilitation of owner-occupied or rental housing for very low- and low-income households; finance permanent housing for the homeless; or promote rural projects and/or homeownership projects. A project may qualify if it is designed to provide housing for families or individuals who earn up to 115% of area median income; located in a neighborhood where the median income is equal to or less than the targeted income level; located in a federal enterprise community or empowerment zone, or if it falls into one of several other eligibility categories; a small business; designed to create or retain a significant number of jobs for people at or below the targeted income level; designed so that at least 51% of families who would benefit have incomes at or below the targeted income level. AHP can be grants and/or subsidized loans priced at 0.0% to market rate based on project needs. Maturities to 30 years. CLP funding is provided at the Federal Home Loan Bank cost of funds, very close to Treasury rates. Terms are fixed or variable, with maturities to 30 years. Targeted income levels are household incomes equal to or less than 115% of area median income in rural areas and equal to or less than 100% of area median income in urban areas. Financial institutions in Pennsylvania that are members of the Federal Home Loan Bank of Pittsburgh may apply for the funds. Members of the FHLB may obtain CLP advances for use in commercial and economic development or affordable housing projects. John Bendel Senior Vice President Federal Home Loan Bank of Pittsburgh 601 Grant Street Pittsburgh, PA (412) (412) (fax) jbendel@fhlb-pgh.com Web Site:

3 NATIONAL CREDIT ENHANCEMENT/FINANCING S AFFORDABLE HOUSING ORGANIZATION AND FEDERAL HOME LOAN BANK OF PITTSBURGH Home Buyer Equity Fund Designed to help first-time home buyers with down payments and closing costs. Buyers must complete an approved homeownership counseling program, obtain mortgage financing from member bank, and contribute funds toward down payment and closing costs. Contributions can be savings, gift, tax refund, inheritance, or any funds accumulated by home buyer. Eligible properties are single-family owner-occupied units (may include townhouses, duplexes, condominiums, and modular units). Eligible buyers are at or below 80 % of area median income. With a 90% loan guarantee, lenders can make 100% LTV mortgage loans to moderate-income families outside of metropolitan areas. Income limitations for applicants are 115% of the county median income. FHLB matches buyer s savings. For every $1 of buyer contributions, FHLB will provide $3 in grant assistance up to maximum of $4,000. FHLB-member financial institutions must have first-time home-buyer program and must make affordability concessions, such as waived or reduced fees, below-market interest rates, or reduction in points. Members register buyers; FHLB provides grant funds to member banks, which in turn transfer funds to buyers. John Bendel Senior Vice President Federal Home Loan Bank of Pittsburgh 601 Grant Street Pittsburgh, PA (412) (412) (fax) jbendel@fhlb-pgh.com Web Site: U.S. DEPARTMENT OF AGRICULTURE, RURAL DEVELOPMENT (USDA, RD) Guaranteed Rural Housing Loan Program Interest rate and points are negotiated between lender and borrower. Terms are 30 years, fixed rate. There is a one-time guarantee fee of 2% of the loan amount. The lender originates, processes, and closes the loan. After the loan note guarantee is issued, the lender may sell the loan to a secondary market lender or any other approved lender; or the lender may retain and service the loan. Frank Wetherhold Director Single-Family Housing Program U.S. Dept. of Agriculture, Rural Development 1 Credit Union Place, Suite 330 Harrisburg, PA (717) (717) (fax) frank.wetherhold@pa.usda.gov Web Site:

4 Section 502 Direct Program Program provides residential financing for low-income families whose incomes do not exceed 80% of county median income. Bank provides a 15-year fixed-rate loan with 30- year amortization. Interest rate is negotiated between borrower and lender. The maximum mortgage amount is the 203(b) limit. Bank acts as participating lender. Bank takes first mortgage while RD takes second mortgage. Both the bank and RD remain responsible for final underwriting and servicing of the loan.

5 NATIONAL CREDIT ENHANCEMENT/FINANCING S AFFORDABLE HOUSING ORGANIZATION AND U.S. DEPARTMENT OF AGRICULTURE, RURAL DEVELOPMENT (USDA, RD) Section 515 Multifamily Housing Program New construction or substantial rehabilitation of rental housing in rural areas. Tenants must be low or moderate income. RD provides a permanent 30-year mortgage when construction is complete. Loans can be made to nonprofit or forprofit corporations, partnerships, housing authorities, or individuals. RD lends up to 100% of the lesser of development costs or appraised value to nonprofit developers and 95% of those costs to all other applicants. Rates are competitive with private lenders, but nonprofit and limitedprofit borrowers receive interest credit to reduce the effective rate to 1%. Loans are for a 30-year term with 50- year amortization and require lowincome use for the term of the mortgage. Rates and terms are negotiated with a lender; maximum term is 40 years with the maximum rate set by NOFA. The 2002 maximum is 300 basis points over the 10-year Treasury note rate. Loan-to-value up to 97% for nonprofits and 90% for others. RD guarantees up to 90% of the loan amount. Entitlement communities (cities, counties, townships, and boroughs) receive 70% of total community development allocation. States receive 30%, which must be redistributed to non-entitled communities. Both entitlement and state grantees must spend 70% of funds on activities that benefit low- and moderate-income people. Balance of expenditures must be for activities that address slum and blight conditions on an area and/or spot basis or that meet urgent needs. Banks finance interim construction loans based on a commitment from RD. RD and project architect make inspections, and RD approves all progress payments. Gary Rothrock Program Director U.S. Dept. of Agriculture, Rural Development 1 Credit Union Place, Suite 330 Harrisburg, PA (717) (717) (fax) gary.rothrock@pa.usda.gov Web Site: Section 538 Guaranteed Multifamily Housing Program New construction or substantial rehabilitation of rental housing in rural areas. Tenants must have incomes below 115% of median income. Loans can be made to nonprofit or for-profit corporations, partnerships, housing authorities, or individuals. The lender originates, processes, and closes the loan. After the loan note guarantee is issued, the lender may sell the loan to a secondary market lender or any other approved lender; or the lender may retain and service the loan. Grantees can make lumpsum deposit of CDBG funds into financial institution to establish a fund for rehabilitation of privately owned properties. Financial institutions can also provide services to grantees that undertake economic development activities. U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT () Community Development Block Grant (CDBG) Funds Acquisition of real property; construction or rehabilitation of site improvements and public facilities; rehabilitation of residential property; down-payment assistance; public services; economic development; and planning and administrative costs (20% of entitlement grant plus program income). Joyce Gaskins Director, Office of Community Planning and Development 100 Penn Square East, 12 th Floor Philadelphia, PA (215) , ext (215) (fax) joyce_gaskins@hud.gov Web Site:

6 NATIONAL CREDIT ENHANCEMENT/FINANCING S AFFORDABLE HOUSING ORGANIZATION AND U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT () FHA Home Mortgage Insurance Section 203(b) FHA Home Mortgage Insurance for Rehabilitation Section 203(k) Construction of new, or purchase of existing, owneroccupied 1- to 4-family residential properties or refinancing of indebtedness on existing housing. The acquisition and rehabilitation of 1- to 4-unit residential properties by nonprofit borrowers or owneroccupants. Interest rate and points are negotiated between the applicant and the mortgagee. Market interest rate; maximum mortgage amount is based on the lesser of either 110% of ascompleted value, or the total of current appraised value plus the cost of rehabilitation. FHA guarantees the lender against financial loss for up to 30 years; lenders originate, process, underwrite, disburse funds, and service the loan. Lenders originate, process, underwrite, inspect for payments, disburse funds, and service the loan. David Dwyer Chief, Customer Service Center Mid-Atlantic Region 3600 West Broad Street Richmond, VA (804) , ext (804) (fax) David_Dwyer@hud.gov Web Site: Home Equity Conversion Mortgage Program Program provides FHA insurance on reverse mortgages made by lenders to older home owners; loans may be sold to Fannie Mae. Payments to borrower are based on borrower's age, mortgage interest rate, and maximum claim amount. Older home owners retain ownership of their houses and may sell and move at any time. All eligible borrowers must be 62 or older. Interest may accrue on outstanding balance at either fixed or adjustable rate. Borrowers may choose from among five payment options. Under tenure option, borrower receives monthly payments from lender as long as borrower lives and continues to occupy house as principal residence. Payment plans can be changed or modified at any time. All FHA-approved lenders may participate. Mortgage proceeds paid by lender and/or are secured by first and second mortgages. Borrower pays mortgageinsurance premium to reduce lender's risk of loss. Insurance premium, closing costs, and origination fees are financed in the loan.

7 NATIONAL CREDIT ENHANCEMENT/FINANCING S AFFORDABLE HOUSING ORGANIZATION AND U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT () HOME Funds Eligible activities include rehabilitation, new construction, acquisition, tenant-based rental assistance, and low-income homeownership. 60% of program funds are allocated to local governments and 40% are allocated to states. Size of allocation is based on vacancy rate; occupied rental units that are overcrowded, have incomplete kitchen or plumbing facilities or are high-cost units; rental units built before 1950 and occupied by low-income families; above-average costs of replacing sub-standard rental units; and population multiplied by net per capita income. None, but banks should be aware of this program because they may become involved in a partnership in which these funds are used. Joyce Gaskins Director, Office of Community Planning and Development 100 Penn Square East, 12 th Floor Philadelphia, PA (215) , ext (215) (fax) joyce_gaskins@hud.gov Web Site: Title 1 Insurance Division U.S. DEPARTMENT OF VETERANS AFFAIRS (VA) Loan Guaranty Program Eligible improvements include the alteration, repair, and/or improvement of single-family homes, manufactured homes, small multifamily buildings, and nonresidential structures. Eligible users are honorably discharged veterans who have served a specified number of days on active duty; individuals who honorably complete six years of service in the Reserves or National Guard are also eligible. Interest rate is negotiated between borrower and lender; FHA insures loans for alteration, repair, or improvement of existing single-family structures for up to $25,000 for up to 20 years and manufactured homes that qualify as real property for up to $17,500 for up to 15 years; loans on multifamily properties up to $12,000 per dwelling unit or $60,000 for the structure for up to 20 years. There is no equity requirement for these loans. No minimum or maximum loan amount; 100% mortgage financing; interest rate and points are negotiated by buyer, seller, and lender. Lenders originate, process, disburse, and service the loans and may charge points and an origination fee of not more than 5% of the amount advanced, which may be financed. If points are charged, expects that there will be some reduction in the interest rate charged to the borrower. Banks and mortgage companies originate VA loans using VA underwriting guidelines and close the loans. Lenders may charge a 1% origination fee; veterans may also pay appraisal fees, discount points, and closing costs. Mary T. Worthy Housing Program Policy Specialist 451 7th Street, SW, Room 9272 Washington, DC (202) , ext (800) (for brochures and handbooks) (202) (fax) Mary_TWorthy@hud.gov Web Site: John Everard Loan Production Officer U.S. Department of Veterans Affairs 1240 East 9 th Street Cleveland, OH (800) , ext (216) (fax) vahomesite@vba.va.gov Web Site: homeloans.va.gov