HUD ANNOUNCES FUNDING TO HELP FAMILIES IN CENTRAL CONNECTICUT FIND OR KEEP HOMES

Today, U.S. Department of Housing and Urban Development Regional Director Taylor Caswell joined New Britain
Mayor Timothy Stewart to announce a $35,000 grant to Neighborhood Housing Services of New Britain to help
families and individuals find or keep homes. The funding is part of $44 million awarded nationwide.

The grant is awarded under HUD's housing counseling program, which provides critical funding to help local agencies assist families in becoming first-time homebuyers by helping them to realistically evaluate their readiness for a home purchase, understand their financing and downpayment options, and navigate what can be an extremely confusing and difficult process.

"New Britain is fortunate to have exceptional partners such as HUD and Neighborhood Housing Services to help local residents realize and maintain homeownership," said Mayor Stewart. "Neighborhood Housing Services and its educational and counseling programs have made a positive difference, not only in the lives of many New Britain families, but also in the quality of life in our neighborhoods as well. I am grateful to Director Caswell and HUD for the continuing support of this outstanding organization and the opportunities they provide to local residents."

Housing counseling agencies also provide assistance to homeowners who are facing mortgage delinquency and default. In addition, renters and homeless individuals also benefit from housing counseling services provided at HUD-certified agencies.

"The value of housing counseling cannot be overstated," said Caswell. "Housing education programs offered by Neighborhood Housing Services of New Britain help families make informed choices before they take the important
step of homeownership."

Neighborhood Housing Services of New Britain has been an excellent partner in administering HUD housing education programs. The agency has been providing housing related services to low and moderate income neighborhoods in
New Britain and Central Connecticut for 28 years. Over the past year, Neighborhood Housing Services of New Britain has provided housing education services to 1,070 individuals/families, 195 of whom have become first-time homebuyers. In addition, the agency has helped 74 households avoid foreclosure this past year. With the new
funding announced today, more than 300 people are expected to receive assistance.

"As the executive director of Neighborhood Housing Services of New Britain, I am proud of the homeownership and affordable housing work we do to help people and neighborhoods move up in the world," said Alan Watson. "But let
me be very clear here - what we do, we could not do alone. It is only through the critical support we receive from partners like HUD that we are able to offer the programs and services that help New Britain and Central Connecticut families build a wealthier future."

In addition to the direct grant being awarded to Neighborhood Housing Services of New Britain, approximately $300,000 is awarded annually through national intermediary organizations with non-profit members in Connecticut.

This year with foreclosures on the rise, HUD is emphasizing the importance of housing counseling services more
than ever because many housing counselors offer assistance to homeowners who are facing mortgage default or delinquency.

When announcing the funding to Neighborhood Housing Services of New Britain, Mr. Caswell also discussed a new program that may help homeowners who are facing foreclosure. The program - FHA Secure - will be administered
by the Federal Housing Administration, the branch of HUD that insures mortgages against default.

Under the FHA Secure plan, FHA will allow families with strong credit histories who had been making timely mortgage payments before their adjustable loans reset to a higher rate, but who are now in default, qualify for refinancing.

"FHASecure is designed for people who are good borrowers, but were steered into high cost loans with teaser
rates," said Caswell.

Traditionally, the FHA has provided first-time homebuyers, as well as homebuyers with less than perfect credit,
with a safe alternative to high-cost financial and non-traditional loan products. The FHA Secure initiative will
operate under the same safe guidelines as the FHA's existing mortgage insurance program - eligible homeowners will be required to meet strict underwriting guidelines and pay a mortgage insurance premium, which offsets the risk to
FHA's insurance fund at no cost to the taxpayer.

FHA Secure, like all FHA products, will continue to offer unprecedented foreclosure prevention assistance. The FHA has never permitted and will not include pre-payment penalties or teaser rates that are common in exotic mortgages and have caused much of the current market troubles.

To qualify for FHA Secure, eligible homeowners must meet the following criteria:

1. A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset;
2. Interest rates must have or will reset between June 2005 and December 2009;
3. Three percent cash or equity in the home;
4. A sustained history of employment; and
5. Sufficient income to make the mortgage payment.

For more information about FHA Secure and other homeownership programs, please call 1-800-529-4282. For a list
of the 22 HUD-certified housing counseling agencies in Connecticut, visit www.fha.gov.

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