December 22,2003

PEOPLE'S BANK PARTNERS WITH OTHERS TO RESTORE CITY NEIGHBORHOOD

NEW HAVEN, CONN. - People's Bank, Neighborhood Housing Services (NHS) of New Haven and the City of New Haven have joined forces to rehabilitate six houses and construct one new home in the West River section of New Haven. The houses will be made available to low- and moderate-income borrowers.

On behalf of NHS, People's Bank submitted an application to the Federal Home Loan Bank Board (FHLBB), through that agency's Affordable Housing Program, for a grant of $210,000 to help renovate and build these homes. Each year, the FHLBB sets aside 10 percent of its revenues to provide grants to nonprofit organizations promoting affordable housing initiatives. The FHLBB requires a member bank, like People's, to sponsor the application of the nonprofit organization seeking funding. This grant subsidy will enable NHS to sell the homes for $30,000 less than their total development cost, making them more affordable for low- to moderate-income borrowers.

As part of the Affordable Housing Program grant, People's Bank has agreed to write all of the final mortgages to the homeowners who will buy the newly renovated or constructed homes. The bank will offer new homebuyers its "Affordable Lending" mortgage, which helps low- to moderate-income applicants qualify for mortgage loans.

"This project augments People's efforts to create homeownership opportunities for New Haven residents. As the number one lender to low- to moderate-income borrowers in the Elm City, according to Home Mortgage Disclosure Act (HMDA) statistics, People's is proud of its lending initiatives here," said Timothy Hodges, vice president of People's Affordable Lending Group. "With our homeownership training classes and our outreach to low- and moderate-income communities, this homebuilding project with NHS is a natural extension of our commitment to partner with the City of New Haven and its nonprofit organizations to revitalize local neighborhoods."

NHS's goal is to "stem the tide of vacancy and neglect in targeted city neighborhoods," said Jim Paley, executive director of NHS. "The affected properties are tightly clustered within the neighborhood, forming a project with the power to make a noticeable change in the appearance of New Haven streetscapes. Our organizational mission promotes homeownership and the stability of resident populations in neighborhoods that have a low rate of owner-occupied homes."

NHS has worked for 23 years to improve New Haven neighborhoods, restoring or constructing more than 250 homes for city residents in that period. NHS has worked in the West River neighborhood in the past, partnering with such institutions as the Hospital of St. Raphael, the Mutual Housing Association of South Central Connecticut, the West River Neighborhood Association and other nonprofit community agencies.

There are 1,401 households in the West River area. Of those 1,401 households, only 288 -- or 21 percent -- live in owner-occupied homes, well below the 30 percent of owner-occupied homes citywide.

To help make this project a reality, the City of New Haven made available at a nominal cost five properties located at 34 Gilbert Avenue, 40 Gilbert Avenue, 95 Gilbert Avenue, 19 Judson Avenue and 14 Judson Avenue. All properties except the 14 Judson Avenue property are two-family homes, in which new buyers will have the added cushion of rental income when making mortgage payments.

"New Haven's strength lies in its neighborhoods. It always has and it always will," said New Haven Mayor John DeStefano. "To protect our greatest asset, we want to do all we can to restore some of our neglected homes to their past glory. In doing so, we improve and strengthen our neighborhoods one street and one property at a time, creating homeownership opportunities in the process." DeStefano added, "In addition to increased homeownership opportunities, West River is in need of sufficient funds to renovate its wonderful housing stock, 33 percent of which was constructed before 1939, and a full 67 percent of which was built before 1960." NHS's ability to gain the FHLBB grant through People's Bank was enhanced by its partnership with the city in acquiring these properties.

The one new home that is currently under construction is located on a formerly vacant lot at 161 Porter Street. This lot was donated by a private individual. The home was designed by Yale School of Architecture students who donated their time to this project. The NHS partnership with Yale also enhanced People's Bank's sponsorship of the FHLBB grant request.

Of the seven properties being restored or built, NHS had to purchase only one -- 64 Gilbert Street -- from a private investor.

Rehabilitation and new construction work on all of these properties is scheduled for completion in 2004. The one-family homes will sell for approximately $85,000, the two-family homes for approximately $150,000. Several of the homes are already under deposit. Parties interested in the remaining homes may contact the New Haven HomeOwnership Center, a subsidiary of NHS, at (203) 777-6925.

People's (peoples.com) is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest state-chartered bank in Connecticut with assets of $12 billion, 154 branches and more than 230 ATMs. People's is a leader in consumer and commercial banking, residential lending, insurance sales, supermarket banking and is the nation's 19th-largest issuer of MasterCard and Visa credit cards. People's subsidiaries offer brokerage services, asset management, equipment financing and leasing, and insurance services.

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