Homeland Bankshares is rolling out a program to provide affordable mortgages in America's Heartland.

Homeland, whose five banks do business throughout Iowa, has committed $3.75 million for a lending effort that targets low- and moderate-income families. The $1.2 billion-asset holding company estimates it can make 80 to 90 mortgages with the commitment.

"We think there's a need in the community for this type of program," said Brad Condon, senior vice president in charge of mortgages.

Homeland competes with large lenders like Norwest Mortgage and Mercantile Bancorp., but Mr. Condon said his bank fills an important need in reaching smaller communities.

The lending program, in which down payments are reduced and many fees waived, began this week and is expected to run through the end of the year. Homeland is getting the word out by contacting real estate agents and distributing brochures to community groups.

While reaching out into the community, Homeland also had to coordinate efforts among its banks - no small task. "Lending officers in each of the banks generally want to do their own thing," Mr. Condon said.

But in a show of unanimity, each institution is operating the program in the same fashion. None of the banks is requiring a large down payment, a concession that is expected to attract customers.

"Saving for the down payment is one of the biggest detriments to homebuying," Mr. Condon said.

Borrowers are required to put up just 3% of the purchase price and buy private mortgage insurance. Borrowers do not have to put up anything if they can get their relatives to put 10% toward the home.

The program is available to borrowers whose incomes are 80% or less than the median income earned in their community. According to figures supplied by Homeland, the qualifying incomes range from $30,950 annually in the Waterloo/Cedar Falls area to $38,650 in and around Des Moines.

Each loan carries a fixed rate for the first 60 months, with the rate adjusting annually after that. There is no minimum loan amount and terms of up to 30 years are available, Mr. Condon said.

Homeland is waiving all origination fees and points and is crediting to borrowers their $300 application fee.

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