Following the adoption by Savings & Community Bankers of America of a Statement of Principles on Housing Opportunities, in 1993, member savings institutions have undertaken a broad range of initiatives to carry out this commitment. Many of these initiatives are unique to SCBA, while several include other sectors of the financial community, such as community-based organizations and various levels of government. While some of these initiatives are recent and novel, many are logical extensions of this industry's long record of involvement in and support of housing and community development and its sensitivity to the financial needs of people and communities.
From the elderly to urban youth corps members to the mentally and physically disabled to people living with AIDS, these groups and many others are benefitting today from programs that SCBA members spearhead. Working with state housing finance agencies, nonprofit organizations, community advocacy groups, and consortia of other lenders, SCBA members are making these dream projects a reality.
The employees and spouses of SCBA and its member institutions are also personally involved in a variety of community development activities -- painting homes with the Christmas in April program; contributing clothes, food, and money to flood victims; teaching at consumer credit counseling workshops; and selling home-made crafts to benefit charity at the trade group's annual convention.
In fact, the American Society of Association Executives singled out SCBA's Family Disaster Relief Fund and Housing Partners programs on its Advance America Honor Roll for efforts that were "vital and add real value to society."
Listed below are just a few examples of the innovative projects SCBA members are implementing -- evidence that savings and community bankers are leading the way in reaching out to their communities, especially to those who need us most.
* Assistance for the disabled. Across the nation, SCBA members provide rural rental housing for very-low-income and low-income elderly, mentally and physically disabled, and homeless persons. In many programs, local housing authorities provide on-site counseling and social services. Some projects rehabilitate existing properties; others involve new construction. Where Federal Home Loan Bank assistance is provided, it typically amounts to about 5% of the cost of the project; the rest is financed by the SCBA-member lender.
* Working together with youth service corps. A youth service corps in the Philadelphia area works side by side with professional contractors to renovate property for very-low-income corps members as a group home. A member savings association makes the project possible by providing 80% of the financing.
* Working with Habitat for Humanity. SCBA members have developed special relationships with this leading nonprofit organization by helping to construct new homes for very-low-income and low-income first-time buyers.
In California, one lender is helping build 118 units for moderate- and low-income borrowers, most of them in areas damaged by the Northridge earthquake.
An Atlanta-area SCBA member is involved in the largest Habitat project in the state of Georgia, helping to build more than 50 new homes.
* Consortium loans. In Delaware, a consortium of nine lenders led by an SCBA-member savings bank will finance the rehabilitation of 54 single-room units for the homeless. An Affordable Housing Program award from the Federal Home Loan Bank of Pittsburgh will provide support.
* Housing for homeless women with AIDS. A Massachusetts co-operative bank provided funds to acquire and rehabilitate rental housing for very-low-income women who have the HIV virus.
* Neighborhoodwide revitalization. Another co-op bank has provided funds to acquire and rehabilitate 19 buildings in a run-down city area, providing 100 new rental units targeted at very-low- and low-income occupants. The program also helps the federal government clear out its inventory of real estate: 13 of the buildings being rehabilitated are real estate held by the FDIC.
* Large-scale low-income rental projects. Savings institutions make more credit available to build multifamily projects than any other group of lenders. In Florida, this means that low-income elderly residents can live in a neighborhood setting, close to one another. SCBA members are funding construction of a 240-unit multifamily rental complex for low-income elderly persons and families and a 188-unit multifamily rental project for very-low- and moderate-income households. The latter program even includes funding for on-site day care, a bank and a convenience store.
* Working with churches. Together with Associated Catholic Charities, a Baltimore member institution is creating a long-awaited 120-unit single-room occupancy homeless complex and is joining a local church in financing the rehabilitation of a senior citizens complex.
* Housing through sweat equity. One rural lender requires the purchaser to provide sweat equity in order to qualify to purchase one of 70 rural single-family and cooperative units that are now under construction.
* Housing homeless AIDS victims. Many projects require the sponsoring lender to coordinate funding and staff support from varied sources.
One example of this is in the Atlanta area, where an SCBA member savings institution, the city of Atlanta and. a local nonprofit organization jointly were approved for a Federal Home Loan Bank System award to change an old office building into 46 new single-room occupancy units.
In a Chicago-area program, a member institution, local community groups, the Illinois state housing finance authority, and the city worked together to rehabilitate vacant single-family homes.
Proactive Programs
SCBA-member institutions across the nation have implemented proactive target marketing activities to ensure that minority and low-income applicants can take full advantage of the credit opportunities available to them.
One institution was recently honored by Social Compact, a partnership of nonprofit housing and community development leaders and financial services institutions.
Working in partnership with La Habra Neighborhood Housing Services in East Los Angeles, this California institution helped to create quality affordable housing in nine neighborhoods for low- and moderate-income families.
Demonstrating its commitment to these neighborhoods, the institution made 69% of its loans to low- and moderate-income borrowers and 44% of its loans to minorities.
As the 1993 Home Mortgage Disclosure Act data show, proactive programs like these are paying dividends.
Led by minority and low-income groups, loan applications and new loan originations are outpacing increases in loans and applications by other borrower groups.
Among these successful programs:
* Member institutions have produced videos about how to buy a home. Some videos are targeted at helping the Hispanic community, and air on Spanish-language cable television stations.
* Institutions have hosted community loan fairs to take applications for home purchases, provide education about how to purchase a home, and give instruction to potential small-business entrepreneurs about how to find financing.
* Institutions have produced effective credit counseling and credit education workshops. In some programs, upon completion of the workshop, a notation is made on the individual's credit report and he or she becomes eligible for submarket-rate loans.
* Institutions have undertaken second-look loan review programs, working with community groups.
Under these programs, community representatives sit on a board with lender representatives to reconsider previously rejected loan applications.
State Trade Group, Member Partnerships
Building on their history of successful pro bono programs, state trade organizations representing SCBA member institutions are redefining the role of the trade group as a partner with its members in new business ventures to help their communities:
* State trade associations are working with their members to provide industry-sponsored statewide down-payment assistance and mortgage rate buydowns. The programs leverage industry contributions, together with Federal Home Loan Bank Affordable Housing Program and Community Investment Program funds to provide assistance to those most in need.
* State trade associations have created consortia through which lenders can provide funds to develop communities on a broader scale than one lender could do alone.
Consortia build larger projects, such as shopping centers, hospices and hospitals, group homes, homeless shelters, and multifamily rental units, that serve as cornerstones of the community. Consortia work with cities and states to gain broadbased support for their projects. Many consortia-funded projects are nontraditional projects that communities need, but that fall outside of secondary market underwriting guidelines.
The commitment of savings and community bankers to affordable housing doesn't end here. This is our heritage, and our efforts in support of housing and community development will continue.
