COUNTY COMMISSION AND LENDERS CONSIDER ADOPTION OF PROGRAM TO HELP HOMEBUYERS

Under a private brokerage's proposal, first-time homebuyers in Cape Girardeau may get a break if they fall into the right category.

James Lahay, first vice-president with Stifel, Nicolaus & Co., Inc., traveled from St. Louis last week to visit the Cape Girardeau County Commission. He told them about his company's plan to sell tax-exempt bonds to provide a pool of money.

Cape County lenders could lend the money to first-time, low- or middle-income homebuyers who typically wouldn't qualify. The interest rate would be around 6.5 to 6.75 percent with 2 1/2 or 3 percentage points assessed up front for processing fees.

Lahay said lenders in the program would bear risks associated with any loans, but they would receive the fees and part of the interest on money available through the bonds.

Greene County lenders already participate, with several Springfield-area residents taking advantage of the low-interest loans.

Eight bankers from various facilities met with Cape County commissioners on Thursday to give their opinion of the Stifel-Nicolaus plan, and they brought plenty of questions with them. The most common was about down payments.

Chuck Thiele with Capital Bank said interest rates weren't the most important issue -- some banks are offering 8 percent with no points -- but the down payment was.

"It is hard for them to come up with a few thousand dollars," he said.

Ollie Miller, president of Mercantile Bank, said interest rates already were low and Stifel-Nicolaus didn't provide enough information for him to make a judgment.

"The rates are very favorable and seem to be trending down," he said. "What wasn't in their communique is how this program will actually work."

Presiding Commissioner Gerald Jones said he would talk to Lahay and get some questions answered, then run the idea past local bankers again.

Lahay, contacted Thursday in St. Louis, explained that borrowers couldn't eliminate the down payment through his program, but it could be a lower percentage than normal. He said Cape County wouldn't bear any risk at all should it decide to take a portion of the money generated by the bonds.

"The lenders will have the same risk as on all the loans they make," Lahay said. "There will be screening just like always. I don't want a misunderstanding where people think anyone can come in and buy a home."

As the loans are repaid, the bank will get part of the interest and so will bond purchasers.

Jones said he would like to have an answer for Stifel-Nicolaus as soon as possible.

"We don't want to pass something up that will be a good deal for people in Cape County, but if it's going to be a pain in the neck or a duplication of services, why proceed?" Jones said.