Franklin D. Raines, Chairman and Chief Executive Officer of Fannie Mae, the nation’s largest source of financing for home mortgages, announced in New Orleans that Fannie Mae, the Conference of Mayors, and Access Capital Strategies LLC (Access Capital) have created a partnership to increase capital investment and the availability of affordable mortgage financing for low- and moderate-income American families in cities.

"We believe this unique joint process can achieve positive, concrete results in every city in the country, said outgoing Conference President Mayor Deedee Corradini. ì We encourage interested mayors to contact the Conference for more information."

"This initiative builds on the best strengths of cities, lenders, Fannie Mae and Access Capital in an entirely new approach to directing much-needed investment capital to American cities," Raines said. "Access Capital will provide the funds that will purchase Community Reinvestment Act (CRA) loans made by lenders, and Fannie Mae will guarantee the loans. This should help both lenders and investors meet their CRA requirements, and help mayors serve the needs of their neighborhoods."

Mayor Wellington Webb of Denver, the new president of the Conference of Mayors, Mayor Marc Morial of New Orleans, and Mayor Ron Kirk of Dallas are among the first mayors and municipalities to participate in this effort, which plans to expand the secondary market for CRA securitizations through the mutual fund managed by Access Capital, a registered investment advisor. "My commitment is to revitalize neighborhoods and create home ownership opportunities in Denver," said Mayor Webb. "This tool of Access Capital can play a vital role to make that happen."

Mayor Kirk said, "I believe that this program will succeed because Fannie Mae is committed to work with each city, not only in securitizing CRA loans, but in helping to define community needs. Specific programs involving flexible underwriting, partnerships with other entities, and new equity/debt vehicles through Fannie Mae’s American Communities Fund can be introduced which are tailored to each community."

"One of my main objectives is to make New Orleans a national model for community investment," Mayor Morial said. "I am a forceful advocate for private sector investment in our cities. We hope that our efforts can serve as a launching pad for a national program as we work with Fannie Mae and Access Capital Strategies."

Access Capital will now be working directly with participating mayors and with Fannie Mae on a community by community basis. Through this initiative, Fannie Mae will create mortgage-backed securities for the Access Capital Strategies Community Investment Fund, a mutual fund established to make CRA-related investments.

Fannie Mae will work in each of the cities to address the mortgage finance needs specific to each community. Lending institutions can participate by making loans and also by investing directly in the Fund, which was designed to provide banks and thrifts with a new "qualified investment" alternative to meet the requirements of the CRA. Fannie Mae will securitize and guarantee the securities, while Access Capital will purchase and manage the securities in the Fund. In this way, investment capital for lending to low- and moderate-income families in communities will increase.

"This initiative represents a win-win-win strategy," said Ronald A. Homer, chief executive officer of Access Capital, explaining, "cities win through increased home ownership and affordability, the banks gain new customers at minimal risk, and consumers have greater access to favorable mortgage rates."