Introduction: The single-family affordable housing market, still relatively new to the banking industry, has experienced rapid growth and improved performance as the market has matured. While a few national banks entered the affordable mortgage market in the late 1980s, most established their programs after 1993.

National banks make billions of dollars of affordable housing mortgage loans annually. This is a revenue producing product line for many national banks. However, this growing line of business is still new to many lenders and competition can be intense for high-quality affordable mortgage loans.

This is why the Office of the Comptroller of the Currency (OCC) released an Affordable Mortgage Portfolio Advisory Letter AL 97-7* (appendix A) that provides guidance for bankers planning to enter this market.

OCC wanted to provide guidance to banks and other affordable market participants about the opportunities and issues within this market. Therefore, on July 23, 1997, the OCC convened a national symposium in Philadelphia titled, “The Single-Family Affordable Housing Market: Trends and Innovations.” The symposium brought together the broad range of participants in this market to discuss the issues, opportunities, and successful affordable mortgage lending strategies and practices that are needed to help keep the affordable market growing and healthy.

National bankers engage in a wide range of activities in the affordable housing market. National banks make loans for affordable single-family mortgages to qualified borrowers; construction and purchase/rehabilitation loans to builders, buyers, and developers of units; mortgage refinancing programs for homeowners; and reverse mortgage financing for elderly homeowners.

Many banks sell their affordable mortgages on the secondary market, others maintain them in portfolio, and still others securitize these loans and sell them in private placements.

This publication presents the views of the diverse participants at the symposium and summarizes the important discussions that followed each session. The symposium offered a sample of public-private affordable mortgage initiatives, discussed numerous issues, and provided examples of lending programs recognized as effective throughout the country.

The traditional reliance on government programs as the major source for affordable housing funding is rapidly changing. Scarce public resources are being used more often to leverage bank funds, spurring joint public-private efforts. Banks and other financial institutions are recognizing new opportunities created by the changing environment and marketplace. The high level of interest and participation in the symposium attested to this growing recognition. Attendees and presenters at the symposium included representatives of banks of all sizes throughout the country; secondary market participants; not-for-profit community development organizations; mortgage insurers; financial regulatory agency representatives; and other active participants in the affordable mortgage market.

We all greatly benefitted from hearing the substantive issues affecting today’s affordable housing finance industry. Symposium panelists shared new information and generated lively discussions about successful affordable housing initiatives.

Symposium participants agreed that the information discussed provided for a thought-provoking day, reflecting the continuing demand for affordable housing finance and the many opportunities to ensure that the dream of homeownership can be realized into the next century. This publication summarizes the symposium for the benefit of bankers, bank examiners, and other parties interested in affordable mortgage finance and expanded homeownership opportunities.

Janice A. Booker, director, Community Development Division, Office of the Comptroller of the Currency

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A National Symposium Convened by the Office of the Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC) would like to express its appreciation to the program presenters who contributed to “The Single-Family Affordable Housing Market: Trends and Innovations” symposium summarized here. Thanks are also extended to the attendees at the symposium, listed in appendix B of this publication, for their questions, comments, and sharing experiences in affordable mortgages.

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