Buyers can avail of a new joint program.
There’s wide buzz in Columbus, OH this week when Huntington Bancshares Incorporated announced it will pledge $10 million in 30-year mortgages that can purchase 100 homes built by Columbus Housing Partnership. By today’s standards, 100 homes is already a good number in the market. You can bet many buyers will turn up when the offer finally becomes available. In the bank’s official press release, Huntington President and CEO Stephen D. Steinour said “CHP has an established record for helping individuals get back on track so they can remain in their homes. Huntington is proud to enter into this strategic partnership with CHP on this groundbreaking program to stabilize Central Ohio neighborhoods. We think that CHP will help us develop better tools and processes for working with homeowners in all of our markets where we service over 185,000 mortgages.”
But buyers beware. Although those with credit scores above 700 can avail of a 4.09 percent interest rate and those who don’t will have to settle for the current rate of 5.01 percent, the houses aren’t in the best condition that you’d expect them to be. Well, beggars can’t be choosers or should we say, buyers can’t be too expectant. And this wasn’t mentioned in the press release.
Houses are said to be in “modest” condition according to some sources. This means that homes are in the $100,000 to $200,000 range. Normally, we wouldn’t expect any newly built structure with an extra area for your kid’s playpen but browsing the CHP’s website, we’ve found some units that sell from $107,000 to $118,000 that are quite large enough. These are renovated 3BR homes but no image of the interiors was uploaded so we suggest potential buyers to scrutinize the details.
Nevertheless, this is still a program that needs to be emulated by banks all over the country. In Phoenix, where house values have tumbled by 50 percent since their June 2006 peak, lenders should take a lesson from Columbus. One hundred homes won’t be pushing home prices back to their old level but it can be a start for a severely battered real estate market.