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Spanning the Region

Sunday, January 1, 2006

Louisville Refinancing Program Targets Predatory Mortgages

Louisville home owners facing foreclosure may be eligible for a new loan product designed to refinance loans that have predatory terms.

In recent years, Louisville has experienced a spike in the number of foreclosures, partially as a result of predatory loans. To respond to the problem, Christie McCravy of The Housing Partnership and Kevin Dunlap of the Louisville Urban League led an effort to design the Anti-Predatory Loan Program. The goal of the program is twofold: to help home owners avoid foreclosure and to help them maintain their homes after the refinancing.

The designers said the success of the program depended on variances from Fannie Mae's underwriting criteria. Fannie Mae agreed to nine variances that include expanded back-end ratio, expanded loan-to-value ratio, credit score exemption and income eligibility flexibility.

For example, if a home owner’s income is below 80 percent of the area median income, Louisville Metro government will provide funds for rehabilitation through a forgivable loan. The maximum loan-to-value ratio is 125 percent. A home owner can earn up to 100 percent of the area’s median income and still be eligible for the Anti-Predatory Loan Program. However, anyone above 80 percent of the area's median income is not eligible for Louisville Metro government funding.

All loans are reviewed by a committee composed of representatives from The Housing Partnership, Louisville Urban League, Louisville Metro government, Old National Bank and Republic Bank.

Those interested in obtaining more information can e-mail McCravy at or call (502) 585-5451 or e-mail Dunlap at or call (502) 585-4622.

Housing Focus of Help for Hurricane Victims

The Federal Home Loan Bank of Cincinnati has announced its New Neighbors program, which provides permanent housing assistance for households displaced by 2005 hurricanes. The Federal Home Loan Bank of Cincinnati has made $15 million available for this new program. Displaced people can apply through financial institution members in the three states covered by the bank: Ohio, Kentucky and Tennessee.

The New Neighbors program will focus on home ownership and rental, with the ownership assistance grants available on a first-come, first-served basis and the rental assistance grants available through competitive offerings.

The home ownership program will make down-payment and closing cost assistance grants of up to $20,000 available to displaced persons who wish to buy a home. Applicants must work through member financial institutions.

The rental program will make up to $20,000 available per unit for up to eight units to the owner of the rental property. That owner, or sponsor, can be a nonprofit, for-profit or government organization with an ownership interest in the property and the capacity for developing and providing rental housing. The sponsor must partner with a member financial institution to submit an application.

Both programs have no income limits for buyers or tenants but do require them to be FEMA-eligible.

For more information, contact Carol Peterson, senior vice president, or Jeff Reynolds, vice president, at 1-888-345-2246.

Wal-Mart Invests in Firms Owned by Minorities

Wal-Mart Stores Inc. of Bentonville, Ark., has created a $25 million private equity fund to invest in businesses owned by women and minorities. The fund will provide equity capital to the business owners for acquisitions, joint ventures and other growth and expansion initiatives. The first investments could be available as early as mid-January.

To be considered for investment, candidates must either operate companies or be in the process of acquiring companies that distribute or have the capacity to distribute products and services to major retailers. Candidates must also be certified as a minority or women-owned or minority-controlled business as defined by the National Minority Supplier Development Council and the Women's Business Enterprise National Council.

For information on this program, call Linda Brown-Blakley at (479) 273-4314.