News: Home Improvement Can Be HIP

County offers little known low-interest loans

Aug 4, 2007 at 2:06 pm

Cheap loans for home improvements in Hamilton County have gone largely untouched but are now attracting borrowers.

In 2002 County Commissioner Todd Portune spearheaded the Hamilton County Home Improvement Program (HIP), which allows residents to take out loans for home improvement at rates up to 3 percent lower than the market rate. There are no income guidelines. The county has allocated $28 million to the program this year.

But only 251 loans were made in 2006, and a mere 1,600 applications have been received since the program's inception through June 30.

Why is the program underused?

"Most people say they're not signing up for the program because they didn't know about it," says Crystal Kendrick, president of the marketing firm The Voice of Your Customer.

After being hired by the county to promote the HIP loans in May, applications and interest in the program have jumped. In June, 54 loans were closed, the most since November 2002.

Keeping the Joneses
Portune started HIP to help keep people from leaving the county for surrounding suburbs.

That can be prevented if the county's property can compete with modern developments in places such as Mason and West Chester, he says.

"Our primary goals are to retain population in the county, improve property value in the county and eliminate blight in the county," Portune says. "By reducing interest rates, it makes it more attractive for people to borrow money and fix up their property."

More than 65 percent of loan recipients reported that they likely would have moved out of the county if the home improvement loans were not available to them, according to Portune.

HIP loans cover everything from remodeling to maintenance and replacement and modernization on the interior and exterior of the home. The loans are now also available for commercial properties valued at less than $350,000. Loans range from $1,500 to $50,000 in a five-year term.

For a built-out community with many historic buildings, having the money to keep homes and businesses up to date can make or break a community.

"The program has sparked over $20 million worth of private reinvestment money in an aging community," Portune says. "We've made older housing stock more attractive and increased property value. This has been a catalyst for others to reinvest in their homes as well, since they see others doing so."

Most loans have gone to the middle class, he says.

Yet until the latest publicity push, loans totaled only a few a month per village and township. Patrick Hanrahan, coordinator of HIP, says a number of issues combined to keep the program underutilized.

Due to the low interest rates of the past few years, many residents who might have taken out a HIP loan decided to refinance or manage their money in other ways, according to Hanrahan. Participating banks were also less likely to push the program when interest rates were so low to begin with. Promotion by both the county and banks was meager at best.

"The agreements between the county and banks was that we would both promote the program," Hanrahan says. "Until this year the county's promotion — other than word of mouth — was mostly us having a brochure printed and distributing it to banks. And the banks were the same — they displayed the brochures, but unless someone asked there wasn't much promotion."

New roof, less crime?
Avondale resident Wendell Young recent utilized the program after hearing about it from Kendrick. Improvements on Young's roof, gutters, driveway and a paint job had been temporarily abandoned for monetary concerns. Now he has the chance to finish the projects and maybe throw in some storm windows before winter, he says.

Young says maintaining his property value and keeping the neighborhood looking good has benefits for the community at large.

"I think many people who live in so-called crime-ridden areas have difficulty finding money to fix up places that are run down," he says. "They're like homes without a welcome mat. People think no one cares, no one wants to invest in the neighborhood and it's a downward spiral.

"This is a great way to (fight crime). You don't have to expose yourself and you don't have to call the cops and you don't have to point fingers. You can make your neighborhood look like a place where criminals won't feel welcome."

Young says he doesn't know anyone else who has taken advantage of HIP loans but thinks more will once he and others help spread the word. Kendrick's campaign has been so successful that the county extended her contract to help encourage more participation in the program.

Talks for the future of the program include an extension of the payback term from five to 10 years, as well as an increased interest rate reduction for loans used for "green" improvements.

"There are so many programs out there today to offer funding to people, but unfortunately the guidelines are so strict that they can only live on a certain street or can only earn below the poverty line," Kendrick says. "HIP is what I call the workingman's program. This is for people who work every day. ... There are no income guidelines, no restrictions on the program that would not allow the working population to participate." ©