Huntington in Unusual Housing Role: Buyer, Not Lender
A unit of Ohio-based Huntington National Bank has acquired a majority stake in 74 housing units in its home area.
Huntington's Community Development Corp. bought 99% ownership of the rental units for $1.7 million from a local partnership of private groups that rehabilitated them for occupancy by poor and moderate-income families, the Columbus-based bank announced late last month.
The partnership retains a 1% stake and has hired a management firm, which is affiliated with some of the partners, to oversee the property.
Bank Unit Gets Rent Checks
With monthly rent checks going to the bank unit, the program differs from typical community reinvestment efforts, in which banks grant or lend money to local housing groups.
"It is pretty unique," said Amy Brusiloff, assistant treasurer in Bankers Trust Co.'s community development group.
For Huntington, the project represents an effort to increase activities under the Community Reinvestment Act and to help revitalize the city.
And the bank receives up to $2.2 million in tax breaks. "It's unusual, but we had no benefit for the tax credits," said Paul Taylor, vice president of Roebuck Investment Partnership and a member of the housing group that sold the property to the bank.
"We were attracted to it because of the quality of the people and the quality of the project," siad Richard B. Smith, vice president of corporate banking.
The bank got involved through several corporate lending customers that are members of the housing partnership.
First Loan for Upgrades
Huntington initially lent the partnership $300,000 at the prime rate to upgrade electrical systems, put in new floors, replace windows, and install new plumbing for the single-family and multifamily housing units throughout Columbus' inner city.
Rent Eats Half of Income
"We look at this as just a huge step for the community," said Mr. Smith, adding that Huntington hopes the project "will inspire other organizations, be they financial insitutions or otherwise, to make these kinds of investments."
The bank said area households with low to moderate incomes pay up to 50% of them on housing, while the suggested share is 21%.
The bank, a unit of Huntington Bancshares Inc., last fall received a "satisfactory" rating by the Office of the Comptroller of the Currency for its community reinvestment activities. "We're not satisfied with a |satisfactory,'" said Mr. Smith. "We're aiming for an |outstanding.'"