The best place to buy a home is also a pretty good place to make home loans. So reasons American Residential Mortgage Corp. of La Jolla, Calif.

The mortgage bank has announced it is opening a Midwest division to take advantage of what it expects to be a robust housing market in the region.

The company points to figures from the National Association of Home Builders of America showing that 20 of the 25 metro areas with the most affordable housing are in the Midwest.

California dominates the list of least-affordable metro areas.

Cincinnati Headquarters

The company already operates in five western states, eight states in the Northeast, and in Ohio. The new division will be based in Cincinnati and will also do business in Indiana, Illinois, and Missouri.

"Our recent branch openings in this region are part of our ongoing strategy to expand into new geographic markets," said James Gilcrest, an executive vice president. "It's clear that consumer confidence is stable in these areas. Housing starts have risen by 10.2% in the Midwest."

The division will be headed by Anthony C. Neal, senior vice president. Earlier, he was a senior vice president with Cincinnati's Star Banc Corp. and with PNC/Central Banc Corp. He will report to Mr. Gilcrest.

Most Affordable

American Residential originated $5.5 billion in home loan in 1992 and had a servicing portfolio of $9.7 billion.

A report from the builders' group, covering the fourth quarter of 1992, listed the Saginaw-Bay City-Midland area of Michigan as No. 1 in affordability. Others in the top 10 were Peoria, Ill.; Muskegon, Mich.; Lincoln, Neb.; Rockford, Ill.; Jackson, Mich.; and Springfield, Ill.

Outside the Midwest, Brazoria and Amarillo in Texas were in the top 10, as was Manchester, N.H. The only other areas outside the Midwest in the top 25 were Binghamton, N.Y., and Nashua, N.H.

New Lending Unit

The rankings are based on the percentage of houses sold in the area that could have been purchased by families earning the area's median income.

In a separate development, American Residential has announced formation of a multifamily lending division and named an executive to run it.

The move opens a new market for American Residential, which had previously restricted itself to single-family loans.

The new division will offer loan financing to apartment owners who want to refinance and to apartment-complex buyers seeking acquisition financing. All the loans will be sold into the secondary market on a non-recourse basis, the company said.

Tony Scholl, named vice president of multifamily lending, will run the division. Mr. Scholl came to American Residential from Southwest Capital Corp. in San Diego, a real estate syndication and consulting firm.

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