Hendersonville Tennessee Real Estate

Owners may apply for up to $30,000

By Chas Sisk • THE TENNESSEAN • February 18, 2009

A state agency is starting a new lending program for home improvements aimed at Middle Tennessee owners.

The Tennessee Housing Development Agency announced Tuesday that it will launch a $3.25 million effort to lend money at reduced interest rates to middle- and working-class homeowners. The loans, called Preserve Loans, will be funded through a three-year line of credit from Fifth Third Bank.

"A lot of people are in loans that they probably shouldn't have gotten and face foreclosure as a result of their trying to preserve the value of their homes," said Ted Fellman, THDA's executive director.

Loans will be capped at $30,000 and will carry a 4 percent interest rate. To qualify, homeowners' income and property values must be below certain thresholds, which vary by county. Proceeds are to be used for emergency repairs and backed by the equity owners have built up in their houses.

The program will start in 42 Middle Tennessee counties and could be extended statewide. Homeowners can apply by contacting one of five organizations that are partnering with THDA: Affordable Housing Resources and Woodbine Community Organization in Nashville, the Community Housing Partnership of Williamson County, Buffalo Valley Inc. in Hohenwald, and Creative Compassion Inc. in Crossville.

THDA estimated it would lend to 300 to 350 homeowners in the program's first round of funding, with more loans issued as money is repaid to the agency. Some proceeds will be used to pay off THDA's debt through the line of credit, which carries a 3 percent interest rate.

The program does not use money that Fifth Third received from the Treasury Department as part of the government's bailout of the financial services industry, said Dan Hogan, the bank's Tennessee president and chief executive.