SAVING AND LOAN

NATIONAL SAVINGS AND LOAN (S&L) SYSTEM WILL BE DEVELOPED ,CONSISTING OF 3 EXISTING S&L INSTITUTIONS, FVN, AND OTHERSELECTED ORGANIZATIONS WITH EXPERTISE IN HOUSING CONSTRUCTION AND FINANCING. FNV WILL BE CENTRAL REGULATORY, FINANCIAL, AND PROMOTIONAL AGENCY WITHIN THE SYSTEM, AND ITS CAPITAL WILL PROVIDE.THE SYSTEM WITH A LEVEL OF MORTGAGE LENDING CAPITAL NECESSARY FOR THE SYSTEM TO BECOME SELF-SUFFICIENT, AND THEREBY FINANCE AN INCREASING VOLUME OF MIDDLE INCOME HOUSING. ADDITIONALLY. FNV WILL PROVIDE FHA-YYPE MORTAGE INSURANCE IN ORDER TO INCREASE THE FLOW OF INTERNAL CAPITAL INTO MORTGAGE FINANCING, AND PROVIDE THE SUPERVISORY AND REGULATORY AUTHORITY NECESSARY FOR THE PLANNED AND ORDERLY GROWTH OF AN S&L MORTGAGE FINANCE SYSTEM,2FNV WILL DEVELOP A 3 YEAR MASS MEDIA PROMOTIONAL CAMPAIGN IN CONJUNCTION WITH ITS MEMBER ASSOCIATIONS TO MAKE POTENTIAL DEPOSITERS AWARE OF THE PRESENCE, SERVICES, AND PREFERENTIAL INTEREST RATES OF S&L"S IN HONDURAS. S&L"S WILL ASSIST PROJECT PROMOTION AND MORTGAGE GENERATION BY PROVIDING CONSTRUCTION FINANCING TO PROJECT SPONSORS: S&L"S WILL FUND CERTAIN SPONSORS WHOSE MORTGAGES QUALIFY FOR FNV DISCOUNT OPERATIONS. SPONSORS, IN TURN, WILL OFFER COLLATERAL TO COVER RISK OF FRONT END FINANCING. FNV WILL PROVIDE S&L"S WITH FUNDS AT 6% ON CONDITION THAT S&L"S CHARGE ONLY 9% TO SPONSORS. FNV WILL ALSO PURCHASE MORTGAGE PARTICIPATIONS TO PROVIDE S&L"S WITH LIQUIDITY. BASED ON AN INTEREST RATE OF 12% FNV WITH RECEIVE 10%, WHILE S&L"S RECEIVE 2% TO ADMINISTER THESE PORTFOLIOS. FNV WILL ALSO ISSUE BONDS TO GENERATE CASH SURPLUS; FNV DRAFT LAW REQUIRES A PERCENTAGE OF INSURANCE COMPANY RESERVES TO BE INVESTED IN SUCH BONDS. TECHNICAL ASSISTANCE WILL BE PROVIDED TO THE FNV IN THE DEVELOPMENT OF A NATIONAL S&L PROMOTIONAL PROGRAM, THE ESTABLISHMENT OF INSURANCE CRITERIA, AND IN THE DEVELOPMENT OF MANAGEMENT PROCEDURES SUITABLE FOR THE EXPANSION OF FNV/S&L ACTIVITIES.