WASHINGTON, D.C. -- African American's home ownership rate of 46.6 is the group's highest ever, but two major mortgage institutions are out to see that it's more on par with the nation's 66.8 percent average.

The NAACP (National Association for the Advancement of Colored People) and Fannie Mae, the nation's largest source of financing for home mortgages, recently announced a five-year partnership to provide expanded mortgage financing, home ownership counseling, and information to help more historically under served black families become homeowners.

Working with lenders such as NationsBank, the multi-million dollar partnership plans to assist 20,000 African-American households with home buying information. NationsBank is part of BankAmerica Corp., the nation's largest bank.

"Although the national home ownership rate is at a record 66.8 percent, the rate of home ownership for minority Americans remains substantially lower," said Franklin D. Raines, Fannie Mae's chairman and chief executive officer.

"Through our partnership with the NAACP, we will provide information and assistance to under served borrowers on a wide range of affordable mortgage products, financial counseling services, and underwriting flexibilities that put home ownership within their reach," Raines added.

Doing its part, NAACP plans to provide credit, financial management and home ownership resource information to approximately 20,000 African-American households in areas served by its Community Development Resource Centers (CDRCs) -- local arms of the civil rights organization that provide a wide range of consumer lending and business development counseling services.

The CDRCs will provide Fannie Mae-approved home-buyer education and financial counseling to 10,000 African-American households over the life of the partnership.

Home ownership and financial counseling will help more blacks qualify for a wide range of affordable Fannie Mae mortgage products, including the Fannie 97 mortgage, which requires a 3 percent down payment from the borrower's own funds.

Fannie Mae also will provide up to $110 million in special financing products, including a new $50 million underwriting experiment specifically tailored to the unique credit needs of the NAACP clientele.

The NAACP plans to open additional CDRCs over the next three years as a part of its overall expansion strategy to increase marketing products and services to under served communities.

"Economic empowerment must include rebuilding communities by educating consumers, providing resources and access to capital for home ownership. Wealth-building through creative programs such as the NAACP/Fannie Mae alliance expands home ownership opportunity and ultimately improves the quality of life for people of color," said Kweisi Mfume, president and chief executive officer of the NAACP.

Under the partnership initiative, Fannie Mae also will:

• Provide $250,000 of funding in each of the first two years of the partnership.
• Offer ongoing technical assistance that will allow the NAACP to establish new CDRCs and further expand its capacity to provide home ownership information and counseling.
• Invest in NAACP-affiliated affordable housing development efforts.
• Explore structures to assist the organization in leveraging its assets to secure down payment funds for eligible borrowers.
• Purchase mortgages originated by local lenders, such as community-based minority and women-owned financial institutions, and national lenders such as NationsBank.

"NationsBank is a national leader in making affordable housing loans to minority and low- and moderate-income borrowers," said Joel Smith, president of the company's East region.

"As the lender for this new mortgage product, we will help hundreds, and possibly thousands, of African Americans achieve their dream of home ownership."

African American consumers seeking more information should contact NAACP's nation CDRC office at (410) 602-9305.

Published: January 28, 1999

Use of this article without permission is a violation of federal copyright laws.