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05-14-2004

Page history last edited by PBworks 17 years, 6 months ago

May 14, 2004

BANK OF AMERICA, FLEET MERGER YIELDS DIVIDENDS FOR HOUSING

Romney announces that $424 million will be set aside for housing programs

 

ROXBURY – In another step toward the creation of more housing, Governor Mitt Romney today announced that the merger of Bank of America and Fleet Bank will result in the set aside of more than $420 million to spur housing for low- and moderate-income families.

 

“We are fortunate to have such responsible corporate citizens in Massachusetts as Bank of America,” Romney said. “In addition to helping develop more housing across our Commonwealth, the funds announced today will also advance the principles of smart growth. By building new housing in community centers, we can revitalize our urban areas and make them attractive to families statewide.”

 

Under state law, banks that acquire other banks must set aside a percentage of the acquired assets located in Massachusetts as a loan to the Massachusetts Housing Partnership (MHP), a statewide quasi-public affordable housing organization. The Bank of America/Fleet Boston merger will yield the state a record $406 million loan and an additional $18 million grant that will be directly targeted for housing.

 

Bank of America and MHP reached an agreement on the loan amount, and the bank agreed to convert a portion of the loan the $18 million grant. The grant can be used in combination with traditional financing to promote housing that serves extremely low-income families, the working poor and homeless, and to develop housing that is smaller in scale and supported by the community.

 

The Bank of America funds nearly double MHP’s loan pool, potentially creating another 10,000 units over the next 10 years. Prior to that, MHP’s fund had grown to nearly a half a billion dollars, made nearly $350 million in loans and financed over 10,000 units of rental housing.

 

The largest previous agreement was when Fleet Financial Corporation made a $143 million loan and $12 million cash grant to MHP following its purchase of BankBoston in 1999.

 

“This loan commitment is unparalleled, and strengthens our long-standing partnership with MHP,” said Anne M. Finucane, President of Bank of America’s Northeast region. “Bank of America is committed to the goal of creating affordable housing and driving neighborhood development for working residents in Massachusetts.”

 

Bank of America has also voluntarily agreed to set aside 10 percent of the loan to offer lower interest rates to eligible non-profit community-based organizations. Eligible non-profit borrowers will know the long-term fixed rate at the start of construction and will not be exposed to possible rising interest rates during construction period.

 

“This is terrific news. We are pleased that Bank of America has agreed to go above and beyond the strict requirements of the law to make this important resource available to build more affordable housing in Massachusetts,” said Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations. “This type of public/private partnership is critical to meeting the housing needs of our state. We look forward to continuing our work with Bank of America as they further develop and implement a comprehensive community investment program for Massachusetts.”

 

The agreement will enable MHP to continue to make loans that are small in scale, community-focused and serve extremely low-income families, using private sector funds at no cost to the taxpayers. It will also enable MHP to find new ways to produce rental housing that complements large-scale and deeply subsidized projects, and find new private resources that will enable more projects to be built.

 

“These funds could not come at a better time,” said Clark Ziegler, executive director of MHP. “It will take new resources and a willingness to think ‘outside the box’ to solve our state’s affordable housing crisis.”

 

 

 

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