Newsday (New York)

June 13, 2003 Friday QUEENS EDITION

Citgroup, NACA Offer

Low-Cost Financing

Citigroup Inc. and a nonprofit housing organization yesterdaysaid they are teaming up to provide thousands of U.S. home buyerswith up to $3 billion of low-cost financing over 10 years.

The bank and the Boston-based Neighborhood Assistance Corp. ofAmerica, or NACA, say the program will primarily help first-timehome buyers, and assist homeowners who might lose their homes ifthey don't refinance at lower rates. It expands a $600 millionlending commitment Citigroup had with NACA.

The program should help borrowers "who otherwise would nothave gotten access to this kind of affordable housing," said AjayBanga, president of Citigroup's North America retail banking. "Ifthis program works well and consumers like it, it may beexpanded."

Citigroup has patched up its once stormy relationship withNACA, a former critic of alleged "predatory lending" byCitigroup's Associates First Capital Corp. unit.

The bank, which in 2000 bought the unit from Ford Motor Co.for about $27 billion, last September agreed to pay $215 millionto settle Federal Trade Commission charges that Associatescharged too much for mortgages to borrowers with little money orspotty credit records.

Citigroup in August 2001 stopped doing business with more than3,600 consumer finance brokers, and dropped 300 banks that soldloans to Associates.

"We are very comfortable with the steps Citigroup has taken toeffect change," said Bruce Marks, NACA's president.

Under the Citigroup-NACA program, Citigroup's CitiMortgageunit will offer qualified borrowers, who need not have perfectcredit, up to 100 percent financing, with no down payment,closing costs or fees. Borrowers must participate in aNACA-sponsored home buyer workshop.

The homes purchased must be in neighborhoods where the medianhousehold income is no higher than the city's overall median.

Financing is now available in New York City as well as a dozenother cities. - Reuters

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