Lending partnership helps homeowners, neighborhoods and city

Jennifer Sayers moved into her Drake neighborhood home on the north edge of downtown Des Moines, Iowa, seeking affordable housing. She loved the unique area, known for its distinctive houses and combination of long-time residents and young, urban professionals.

However, like many of the buildings in the neighborhood, Jennifer's 110-year-old home was showing its age. It was in need of new paint, a roof, furnace, air conditioner and water heater. The enormity of the challenge felt a little overwhelming until a neighbor suggested that Sayers should consult a loan specialist at Neighborhood Finance Corp. (NFC).



NFC offers lending programs and other services that facilitate targeted neighborhood revitalization in Polk County through partnerships with residents, governments, community-based organizations and the business community.

NFC's loan offerings include purchase, home improvement and refinance loans. For example, the NFC Advantage is unique in that it combines a forgivable loan subsidy with a standard home mortgage. Twenty percent of the home improvement loan is forgivable annually for up to five years as long as the homeowner remains in the home.

"I refinanced my home through NFC and was able to obtain a $10,000 forgivable loan that I used for home repairs," Sayers says. Although she spent more than $10,000 on repairs, she adds that, "Without the program, there was no way I could have afforded all that work. More importantly, I added only two more years to my mortgage and still kept my monthly payment the same."

She also was impressed with the loan-application process. "The staff at NFC was great to work with," Sayers says. "They were there not only to help me through some challenges, but also provided creative solutions to my financing needs."

Homeowners receive the bids and select the contractors. Once the work is finished, they submit a form and NFC pays the contractors directly.

Since May 4, 1990, NFC has originated more than $300 million in loans and grants that helped rehab more than 5,000 housing units in 27 designated neighborhoods in both Des Moines and West Des Moines, as well as in low- to moderate-income areas in those cities.

"NFC is injecting capital into neighborhoods at risk," Sayers further explains. "Many people in these older neighborhoods can't afford to do all the repairs these older homes need. It is also costly to the city when these homes fall into despair or are foreclosed upon. This is a great program for homeowners, the neighborhood and the city."