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FOR RELEASE: 11 a.m.

Contact:
Christopher Gulotta, CCHRA, 717-249-0789
Kenneth R. Shoemaker, president and CEO, Orrstown Bank, 717-532-6114
Neil Cotiaux, FHLBank Pittsburgh, 412-288-2851, cell: 412-335-9488
Robert Reilly, Congressman Platts: 717-600-1919

$6.7 MILLION IN LOW-COST FUNDING CLEARS WAY FOR SENIORS HOUSING RENOVATION; INNOVATIVE REFINANCING CUTS COSTS, PERMITS ADDITIONAL SITE WORK; CONGRESSMAN PLATTS ALSO CONDUCTS AFFORDABLE HOUSING WALKING TOUR

CARLISLE, PA, July 31, 2006 — U.S. Rep. Todd Platts (PA-19), Orrstown Bank and the Redevelopment and Housing Authorities of Cumberland County (CCHRA) announced today that a low-cost $6.7 million loan will permit the Authority to make nearly $1.5 million in additional project improvements at the One West Penn Apartments for the benefit of area seniors.

At a ceremony in the community room of One West Penn Apartments where Congressman Platts served as keynote speaker, CCHRA Executive Director Chris Gulotta announced that $6.7 million in Community Lending Program (CLP) financing from Orrstown Bank has resulted in the innovative refinancing of the 130-unit project's existing HUD Section 202 mortgage, lowering its interest rate by approximately 4.5 percent. In turn, Gulotta said, this considerable cost savings now permit CCHRA to borrow above the refinanced amount for additional site improvements on behalf of area seniors. CLP financing has been structured as a tax-free loan through the Redevelopment Authority expressly to reduce the interest rate and maximize dollars applied to the renovation.

"This creative approach to refinancing is a prime example of how the municipal and private sectors can work together for the common good," said Congressman Platts, who added that the $6.7 million loan originated with FHLBank Pittsburgh, part of the Federal Home Loan Bank System, using private capital, not tax dollars, to help Orrstown Bank fund an important affordable housing project. Orrstown Bank is an owner-member of FHLBank, a private financial institution cooperative.

Lower costs and fees

Gulotta remarked that both residents of the facility and the community at large will benefit.

"The project's owner, Carlisle Senior Housing Associates and CCHRA looked long and hard at the best way to refinance the 40-year, fixed-rate 9.25 percent Section 202 loan," said Gulotta, who also serves as chair of FHLBank's Affordable Housing Advisory Council. "With a new, 20-year loan rate of only 4.73 percent, refinancing costs were cut in half. In addition, debt service payments were reduced from pre-payment monthly costs of just over $47,200 to post-refinance payments of $43,400. We also experienced a savings of more than $80,000 in fees using CLP when compared to alternative financing. Orrstown Bank and FHLBank Pittsburgh presented us with a very attractive solution to some critical needs."

"Our release of nearly $7 million in Community Lending Program financing at our own cost of funds represents one of the largest disbursements from our Bank for a single project," said John Bendel, director of Community Investment for FHLBank. "Ken Shoemaker, the president of Orrstown Bank, was a strong partner in this endeavor. He really made this loan package happen."

With $1.47 million now available for improvements to One West Penn Apartments, work is starting on much-needed improvements at the 22-year-old complex. Planned changes include the installation of a new roof, new elevators, remodeling of kitchens, upgrades to mobility-impaired units, installation of hardware on entry doors, redecoration of the lobby and additional parking.

West Street Pride tour

Immediately following today's check presentation, Congressman Platts, Gulotta and other civic leaders visited two nearby homes on North West Street that are part of the Pride of Carlisle Neighborhood Development Initiative. The initiative is designed to replace absentee landlords and eliminate blight. Homeowners, through a neighborhood association, are expected to take an active interest in reducing crime, vandalism and other undesirable behaviors.

West Street Pride, a component of the Pride of Carlisle initiative, centers on creating eight new homeownership opportunities in the 300 and 400 blocks of North West Street. Rehabilitated and newly constructed properties will be sold to low- and moderate-income first-time homebuyers. Today, Congressman Platts met with Algerald Hall, whose family is moving out of public housing and is closing on the property at 434 West North Street.

Carlisle Housing Opportunities Corporation, Redevelopment Authority of Cumberland County, Orrstown Bank and FHLBank Pittsburgh are all parties to West Street Pride.

About CCHRA

Established in 1975 to expand affordable housing opportunities and provide support for community development projects, CCHRA administers about $15 million annually in the form of Community Development Block Grant and HOME programs, housing management contracts and real estate development projects. CCHRA owns and manages 149 units of public housing for low- and moderate-income families. All units are located in Carlisle Borough. CCHRA's public housing program is consistently rated a "high performer" by the U.S. Department of Housing and Urban Development.

Forty percent of CCHRA public housing is made available to households with incomes at or below 30 percent of the area median income. The balance is made available to households with incomes up to 80 percent of the area median income. CCHRA gives preference to working families, persons with disabilities, victims of domestic violence and households transitioning from bridge housing.

About the Banks

Orrstown Bank operates 15 offices in Camp Hill, Carlisle, Chambersburg, Greencastle, Mechanicsburg, Orrstown, Spring Run, its headquarters market of Shippensburg and Hagerstown, MD. The bank serves both individual and business customers and also provides trust services.

The Federal Home Loan Bank of Pittsburgh (FHLBank Pittsburgh) is a wholesale bank that serves the housing finance and community and economic development needs of its owner-members. The Bank provides reliable access to low-cost funds, competitive pricing in the purchase of mortgage loans, correspondent banking, technical assistance, affordable housing grants and other programs so members can better serve their own communities. The Bank is privately capitalized and funded, does not use taxpayer dollars, and enjoys a triple-A rating. It currently has 334 members in its district of Delaware, Pennsylvania and West Virginia and approximately $72.5 billion in assets. FHLBank Pittsburgh is one of twelve Banks in the Federal Home Loan Bank System, established by Congress in 1932 to support the residential mortgage activities of local financial institutions.