In 1996, 14 FHLBI members participated in the bank’s first homeownership initiative, a pilot program funded with $500,000 to help local residents purchase homes. Nineteen years later, FHLBI remains committed to its affordable housing mission with three programs designed to address housing needs throughout the lifecycle of homeownership: the Homeownership Opportunities Program (HOP) to help first-time homebuyers achieve their dream; the Neighborhood Impact program (NIP) to assist homeowners with home repairs; and the Accessibility Modifications Program (AMP) to aid seniors and households with disabled members with changes that allow them to stay in their current homes. Read about how three FHLBI members are accessing grants from these programs to improve the lives of their customers.
First-time homebuyers in southern Indiana have found an ideal partner in Freedom Bank. “We were working with several customers who qualified for a mortgage, but they didn’t have enough money saved for a down payment,” explained Freedom Bank Loan Officer Jeff Dicus,. “So we began talking about what kind of assistance was available to help put families into homes.”
That conversation led Dicus and Freedom Bank’s Vice President Scott Neff to sign up for FHLBI’s Homeownership Opportunities Program (HOP), a program that provides up to $10,000 for down payment and closing cost assistance for first-time homebuyers. Within two months of signing up for the program, Freedom helped four local residents purchase homes with HOP grants.
As a locally owned and operated community bank with four branches in mainly small, rural towns, Freedom understands the community and knows its customers. “Word of mouth is essentially our marketing tool for HOP grants,” commented Neff. “In small communities, once you help one or two people, others soon follow.” Because of its positive experience with HOP, Freedom is thinking about participating in FHLBI’s Neighborhood Impact Program (NIP), which provides grants up to $10,000 for home repairs and renovations.
In the meantime, Freedom’s commitment to making homeownership a reality for local residents continues. “We hope to be the first FHLBI member to reach the HOP per member limit of $500,000,” Dicus declared. FHLBI hopes that as well.
1st Source Bank
An elderly couple called the City of South Bend offices inquiring about getting financial assistance to install a lift chair so they could access their home’s second story. Their first attempt yielded no help, but their persistence paid off when they called back a year later. The city, having heard about FHLBI’s Accessibility Modifications Program (AMP), referred them to Shawn Carlton, Assistant Vice President at 1st Source Bank, who helped the couple obtain an AMP grant to purchase and install the lift chair, allowing them to remain in their family home. FHLBI launched AMP in 2014 to address the needs of Michigan’s and Indiana’s rapidly aging population.
“The process of applying for the AMP grant was fairly quick and easy,” explained Carlton. “The couple obtained the two bids required by the program and presented us with all the documentation that we needed to process the application.”
Since this initial application, 1st Source Vice President Mark Gould has been developing relationships with local agencies, such as Catholic Charities to spread the word about AMP throughout the community.
Because 1st Source had already been an active user of FHLBI’s HOP and NIP products, adding AMP to their portfolio of customer tools was simple. The bank became one of only five FHLBI members to use all three initiatives in 2014.
Both Carlton and Gould have advice for other members thinking about participating in any of FHLBI’s homeownership initiatives:
- Be organized! Develop checklists of necessary documentation, along with policies, procedures and memorandums of understanding to ensure everyone involved understands and agrees to the requirements.
- Set expectations with clients up front. Some applications are more complex than others and may take longer to process. It’s also important to remember that not everyone is going to qualify.
Mercantile Bank of Michigan
Mercantile Bank, headquartered in Grand Rapids, Michigan, has accessed $1.2 million in Neighborhood Improvement Program (NIP) grants over the last 10 years to help 150 households with home repairs and renovations, frequently partnering with municipalities that match sources of funding with the appropriate organization. For example, a city inspector may encounter a homeowner that needs to make several improvements. The inspector might send the homeowner to Mercantile for a NIP grant to cover the costs of a new roof and windows but recommend other resources for the remaining improvements.
Mercantile has also participated in HOP for more than 10 years, matching first-time homebuyers with nearly $900,000 to help with down payments and closing costs. Sonali Allen, Compliance & Community Development Officer at Mercantile, distributes information to local housing and supportive services agencies and realtors to get the word out about HOP. She also talks with Mercantile’s loan officers, providing them with just enough information so they are comfortable referring a potential grant recipient to her without feeling they need to be an expert.
“It doesn’t make sense NOT to actively promote the Homeownership Opportunities Program,” declared Sonali Allen. “It’s a chance to establish a relationship with a potential customer, even if you can’t give them a mortgage.”
Allen is eager to start using AMP. She’s already met with two local agencies that help people with disabilities to modify their homes. Allen agrees with 1st Source’s advice to members on getting started with the initiatives. “Develop checklists and simple applications and put it all in one packet,” she suggests. “It keeps documentation together and makes applying for the grants easier.”
For more information about any of FHLBI’s Homeownership Initiatives, visit Community Investment at fhlbi.com or call 800.688.6697.
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