CINCINNATI, June 22, 2007 (PRIME NEWSWIRE) -- A new funding program to help mitigate rising numbers of foreclosures in Kentucky, Ohio and Tennessee was unveiled today by the Federal Home Loan Bank of Cincinnati.
Through the new HomeProtect Program, the FHLBank will make available $250 million in Advances to member financial institutions at the FHLBank's cost of funds. The financial institutions can then use those funds to help homeowners at risk of foreclosure to refinance their homes on more favorable terms. The FHLBank's Board of Directors approved the program this week.
"The surge in home foreclosures nationally is having a devastating effect on many neighborhoods. There are thousands of families who will be put at risk of foreclosure when interest rates are recalculated on their adjustable-rate mortgages," said David Hehman, President and CEO of the FHLBank. "Everybody loses when there's a foreclosure -- the homeowner, the lender, the community. We hope that HomeProtect can help resolve some of these situations without foreclosure."
Mortgages through HomeProtect can be made to homeowners earning 115 percent or less of an area's median income. Homeowners may not take any "cash out" of the refinancing, and they must complete an approved homeowner counseling program. HomeProtect funds are available to members on a secured basis only and are subject to the FHLBank's normal underwriting and collateral policies. Members may borrow HomeProtect funds in amounts up to 2 percent of assets or a maximum of $50 million per year.
HomeProtect is a part of the FHLBank's Community Investment Program, which is designed to finance the acquisition, construction or rehabilitation of owner-occupied and rental housing for families with incomes at or below 115 percent of the area's median income.
The FHLBank is an $82 billion congressionally chartered wholesale regional bank providing financial services for residential housing and economic development to 742 member financial institutions located in Kentucky, Ohio and Tennessee. It has contributed $250.7 million for the creation of 39,338 units of lower-income housing through its Affordable Housing Program since 1990, and $4.5 million to help 879 persons become first-time homebuyers through the American Dream Homeownership Challenge. The FHLBank System includes 12 district Banks, is wholly owned by its 8,100 member institution stockholders and does not use taxpayer dollars.
This news release may contain forward-looking statements that are subject to risks and uncertainties including, but not limited to, the effects of economic market conditions on demand for the FHLBank's products, legislative or regulatory developments concerning the FHLBank System, competitive forces and other risks detailed from time to time in the FHLBank's filings with the Securities and Exchange Commission. The forward-looking statements speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the FHLBank undertakes no obligation to update any such statements.