Leveraging Funding: Homeownership Made a Reality

October 2, 2017
By Ariel Cisneros, Senior Community Development Advisor


Image

Investment Connection started in 2011 with a simple idea—help connect financial institutions, corporate enterprises and community foundations with organizations that have CRA-eligible community and economic development proposals in need of a qualified investment, grant or loan. Investment Connection has helped connect community organizations with more than $27 million in funding within the Federal Reserve’s Tenth District, which comprises Colorado, Kansas, western Missouri, Nebraska, northern New Mexico, Oklahoma and Wyoming. 

Mike Loftin made a presentation at Investment Connection in April 2016 about Homewise, where he is chief executive officer. As a result of the presentation, several connections were made that resulted in new homeowners in New Mexico. 

One such connection was with Michael Miller, senior vice president at United Business Bank. United Business Bank made a $500,000 loan to Homewise to help the organization fund mortgages for working people in Albuquerque. Borrowers tend to be first-time homeowners; many are the first in their families to own a home.  

Homewise is a community development financial institution in Santa Fe, N.M., that has expanded to Albuquerque. From 2012 to June 2017, Homewise’s typical customer had an annual median income of $44,565, though some had incomes as low as $11,878. The median mortgage was $140,500, some were as low as $30,000. Loftin says these funds are changing lives by stabilizing families through affordable housing.

United Business Bank, a community bank with $1.2 billion in assets, is looking at increasing its funding participation with Homewise due to the success of the program. 

“We take our CRA responsibility very seriously,” Miller says. “It is not just the responsibility of the CRA officer but all employees.”

Loftin said the support of United Business Bank has been a big part of Homewise’s ability to offer an affordable and accessible path to successful homeownership.

“Their partnership has directly contributed to increasing the financial well-being of hundreds of Albuquerque families and contributing to the vitality of our communities,” he said. 

As part of obtaining a loan with Homewise, potential homeowners are required to complete an eight-hour homebuyer education program. In recognition of the need for financial education, Homewise offers an additional course called Financial Fitness for Life. The course is not required, though most Homewise clients have taken it. United Business Bank provided a $2,500 grant for the financial education program.

In the Tenth District, there are upcoming Investment Connections on Oct. 25 in Kansas City and Dec. 8 in Wichita, Kan. If you missed Investment Connection at our other locations, you still may view proposals online.

Investment Connection is growing beyond the Tenth District. The Federal Reserve Bank of St. Louis is conducting an Investment Connection Nov. 16 in Memphis. Investment Connection is expected to expand to additional Federal Reserve Bank districts in 2018.