HOME ASSISTANCE PLANS OUTLINED AT CITY MEETING

There apparently is considerable interest in Cape Girardeau in state-funded housing assistance programs for low- to moderate-income residents.

About 60 realtors, developers, contractors and representatives of area lending institutions Wednesday attended a meeting at Cape Girardeau City Hall to learn about various state programs.

Mellodie Wilson of the Missouri Housing Development Commission's St. Louis office outlined the MHDC programs and fielded questions. Wilson said that although the MHDC attempts to aid low- and moderate-income individuals with the programs, it's often difficult to get lending institutions to participate.

"Our purpose is to provide housing assistance for low-income individuals," she said. "It's been a hard sell for a lot of the lenders because of the affordability restrictions, and it's hard to find a good, strong credit-worthy client in that income group.

"It doesn't do any good to have a buyer who qualifies (for a state assistance program) and not have any lenders," she said.

Steve Williams, Cape Girardeau's housing assistance coordinator, said he hoped Wednesday's meeting would serve to inform local banks and other lending institutions in addition to developers, contractors and homeowners of the programs available.

The city has tried to address some housing needs for low- and moderate-income residents through Community Development Block Grants that help fund housing rehabilitation. But Williams said those efforts can't meet the needs of everyone.

"That's never enough," he said. "There are some programs out here that we cannot do, and we rely on the private sector to develop these for our older areas of town where housing might be substandard."

Many of the MHDC programs are directed at private developers who want to provide housing for low-income tenants or buyers.

Wilson said the state offers interest-rate and down-payment subsidies for first-time homebuyers and developers of low- and moderate-income housing. Through those programs a lender is able to charge its regular interest rate, of which the state will subsidize a certain percentage. That enables the homebuyer or developer to enjoy lower financing costs.

Michael Wandrick, a realtor with Century 21 in Cape Girardeau, said realtors often have interested homebuyers who qualify for the programs only to learn there are no local banks participating.

But Wilson said banks needn't be leery of the programs because they're able to secure the same interest rate they would otherwise get. The banks also are able to better serve local developers and contractors by securing a lower interest rate for construction.

"The developers and contractors like the interest subsidies because it makes the work more affordable," she said.

Wilson said there are few lending institutions in the area that participate in the state programs. One reason banks have avoided the down payment assistance program, for example, is because participants were required to keep the property available to low-income residents for up to 15 years.

She said banks often were stuck with the 15-year "affordability requirement" even though they had to foreclose on the property.

Wilson said the affordability period now expires in the event of a foreclosure.

Wayne Nesslein, vice president of Mercantile Bank in Cape Girardeau, said following Wednesday's meeting that Mercantile is interested in the state programs to the extent they can help the bank serve its customers.

"We're in the business to loan money on real estate," Nesslein said. "But we have to make sure we have a safe investment so the bank is secure and thus our depositors are secure.

"At the same time, we certainly have an interest in the community, and, if the state has a program that will assist that borrower, then we have an interest in that. We also do a lot of business with realtors, developers and contractors they're our customers too. If they're interested, and there's a service we can render, then we'd like to help."

Nesslein said Wednesday's meeting was an opportunity for Mercantile Bank to become more familiar with the available programs.

"We need to establish that there's a need there and that there's a market there," he said. "We need to know there really are people out there looking for those types of loans.

"Collateral won't be treated any different. We'll still look at the customer's credit history and the property involved."

Nesslein said Mercantile might be most interested in a state program that, through issuance of bonds, helps first-time homebuyers finance their home or the down payment on their home.

"Presently, we're not involved because there have not been bonds put out recently we could bid on," he said. "Our parent company in St. Louis is involved in some of those programs in the city of St. Louis.

"I want to find out what's available for those citizens out there that would be adaptable and profitable for the bank."