Federal Reserve Bank of San Francisco Cites Performance

Fort Collins, CO, November 5, 2007 � Funding Partners, a Community Development Financial Institution (CDFI), was recently cited in a study conducted by the Center for Community Development Investments at the Federal Reserve Bank of San Francisco.� Within the report, Funding Partners was highlighted as an example of the relative credit strength of community development lending institutions.�

Entitled, Creating a Marketplace: Information Exchange and the Secondary Market for Community Development Loans, the report examines impediments and opportunities to creating greater liquidity within the industry.� Liquidity refers to the practice of selling loan assets (and resulting repayment streams) to third parties in whole or in part to free up capital for subsequent lending activity.� The practice allows financial institutions, such as Funding Partners, to create greater access to capital for its borrowers without growing its asset base.

A fundamental impediment identified within the report rests upon the presumption that community development lenders assume greater risk than traditional lenders.� Target borrowers are often unable to obtain credit through mainstream institutions; loan collateral is typically viewed as substandard; while loan terms are usually more generous than prevailing credit offers.� However, the study contradicts such assumptions based upon empirical evidence, as reported by both the community development and mainstream financial industries.�

Through the reporting period (12/31/2004), FP provided $18.9 million in financing and recognized a net charge-off rate of 1.03%.� In contrast, mainstream financial institutions, which include all federally-chartered banks and thrifts, reported a combined charge off rate equal to 0.56% of loan assets.� Since the study was completed, Funding Partners has grown cumulative lending activity to $21.5 million with net charge-offs growing modestly to 1.50% of loan origination in reflection of the softening housing market across most regions of Colorado.�� ������

Under its community mission to attract and consolidate resources for creation and preservation of safe, adequate housing that remains affordable to low and moderate-income households, Funding Partners has developed a reputation for expanding access to capital to demographic markets and geographic regions underserved by traditional financial institutions.� Since the inception of its loan programs in 1997, FP has accumulated over $10.8 million in loan fund capital and manages an additional $2.6 million on behalf of other organizations dedicated to serving similar markets.�

Through October 2007, FP has originated 1,300 loans with volume in excess of $23.5 million through its loan funds, representing 3,516 housing units in 32 counties across the state.� Total costs of all housing projects exceed $381 million for a leverage rate of 15.8 to 1.   Contrary to common perception, loans made directly to low and moderate households through the House to Home Ownership (H2O) Down Payment Assistance Program� and organizations that serve that population through the MAHLF program consistently perform much better than traditional loan products.� Cumulative losses since inception equal $320,767, or 1.36% of the combined loan portfolio, despite well-documented foreclosure and bankruptcy activity plaguing the general housing market.

To view the complete report, please visit: http://www.frbsf.org/publications/community/wpapers/2007/wp07-01.pdf

For more information, visit www.fundingpartners.org.

CONTACT:

Grady Gardner

Funding Partners for Housing Solutions

Marketing and Communications

[email protected]

(970) 494-2021