GOVERNOR BALDACCI AND HUD OFFICIAL ANNOUNCE FEDERAL FUNDING
TO STATE OF MAINE TO HELP FAMILIES FIND OR KEEP HOMES
Funding part of $143 million awarded nationwide

Today, Governor John E. Bladacci joined HUD Regional Director Taylor Caswell to announce $123,000 in funding to
the Maine State Housing Authority (MaineHousing) to help families and individuals find or keep homes. HUD's housing counseling grants help state and local agencies assist families in becoming first-time homeowners and remaining homeowners after their purchase. Renters and homeless individuals also benefit from housing counseling services funded through HUD grants.

"We appreciate HUD's funding of this grant," said Governor Baldacci. "Today, it is more important than ever that we educate homebuyers about the costs and responsibilities associated with homeownership, as well as the benefits. Thanks to this grant, more people in Maine will be able to have access to homebuyer education." This grant, one of two awarded in Maine, is part of $44 million awarded nationwide for housing counseling programs.

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

MaineHousing will use the funding to provide homeownership and financial education classes in underserved areas of Maine, one-on-one counseling for Native American tribes, and outreach to minorities, people with disabilities, senior citizens and the homeless. Education and counseling services will provide information about predatory lending, mortgage financing, housing opportunities available in Maine, and housing rights under the Fair Housing Act.

MaineHousing Director Dale McCormick said: "We have received housing counseling grants since 1999, and it is a critical part of our work. We have built on it each year to expand the number of people helped. The new grant
allows us to reach out to people coming out of a homeless situation. The recent wave of foreclosures, many
involving people with sub-prime mortgages, shows how important housing counseling can be. Part of our grant will train more non-profits in foreclosure prevention, so they may counsel customers in ways to avoid foreclosure."

Tedford Housing Counseling Agency in Brunswick also received a housing counseling grant in this year's funding.
The agency will use the $23,615 to provide housing counseling to individuals who are homeless or who are at risk
of becoming homeless.

This year with foreclosures on the rise, HUD is emphasizing the importance of housing counseling services more than ever. In addition to helping first-time homebuyers realistically evaluate their readiness for a home purchase, many housing counselors offer assistance to homeowners who are facing mortgage default or delinquency.

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

Under the FHASecure 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 FHASecure 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.

FHASecure, 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 FHASecure, eligible homeowners must meet the following five 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.

Since its inception in 1934, FHA has helped almost 35 million people nationwide become homeowners, making it the largest insurer of mortgages in the world. For more information about FHASecure and other homeownership
programs, please contact a local HUD-certified housing counseling agency.

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