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Revolving Loan Fund Best Practices

Revolving Loan Fund Best Practices. Catherine Bergman Hamilton County S.E.E.D. Loan Fund Background. Down Payment Assistance Use for down payment and closing costs Initially set up for 1 st time home-buyers Business Start-up and Expansion New businesses Expanding businesses

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Revolving Loan Fund Best Practices

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  1. Revolving Loan Fund Best Practices Catherine Bergman Hamilton County S.E.E.D.

  2. Loan Fund Background • Down Payment Assistance • Use for down payment and closing costs • Initially set up for 1st time home-buyers • Business Start-up and Expansion • New businesses • Expanding businesses • Business retention • Upper Story Renovation • Second floor conversion to apartment

  3. Loan Fund Statistics • Down Payment Assistance • 1991 IFA grant $50,000 • 1996 IFA grant $50,000 • Sixty-one loans made since inception • $117,210 loaned • Two losses totalling $1250

  4. Loan Fund Statistics • Business Start-up and Expansion • County Board of Supervisors contributed $28,000/year to reach $300,000 • Thirty-four loans made since 1993 • $356,090 loaned • 115 jobs created as a result • Five losses: $28,127

  5. Loan Fund Statistics • Upper Story Renovation • 2002 Community Development Fund grant of $40,000 • Seven loans made • $58,000 loaned • No losses

  6. Payment Process • Clients are given amortization at closing • Payment books are created and mailed one month prior to beginning of payments • Notice is sent when client nears last payment so that he/she does not over or under pay

  7. Late Payments • 1-2 months past – letter is sent • 2-4 months past – 2nd letter is sent • 4-6 months past – 3rd letter is sent • Deadline to respond is about 14-20 days • This is sent Certified Mail • Small Claims • Most respond immediately • Garnishment • Have only had to garnish one client’s wages

  8. Tips for Program • Build relationship with lenders and realtors • Applications are available for download on our web site • www.develop.hamiltoncountyiowa.com • Annual mailing with applications, brochures, business card • Post cards about down payment program • Provide brochure racks so lenders will put out • Distribute at home show(s)

  9. Tips for Program, cont. • Word of Mouth has been the best way to promote the program • Previous clients • Mayors • Development Groups • Keep community informed of your programs & their successes • City Hall • Development Groups • Realtors

  10. Tips for Getting Paid • Build a relationship with the client • During the loan closing • Periodic communication • I’m in this with you attitude • Stay on top of the payments • Catch them before they get too far behind or it’s too hard to catch up • Keep file information current

  11. Tips for Getting Paid, cont. • Be cognizant of the “rules” of contacting clients so you aren’t harassing them • If you can’t reach the client, go back to the banker • Fear of ruining their credit • Collections threat is huge

  12. Contact Information • Catherine Bergman Hamilton County S.E.E.D. P.O. Box 474 Webster City, IA 50595 515-832-9575 hamcseed@wmtel.netwww.develop.hamiltoncountyiowa.com

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