The result is a remodeling and home improvement loan program within a seven-neighborhood area serviced by Old Northeast. The interest rate on the loans is five percent with no fees to the borrower. If the home is located on what Old Northeast designates a model block, the rate can be lowered to 3 percent. There are no income restrictions. These low cost funds give middle income owners an incentive to stay in the area and prospective buyers a reason to move in.
Construction is complete and there is a waiting list for occupancy.
Repayment terms will be from two to ten years. In part because of its community development efforts, Missouri Bank and Trust has improved its Community Reinvestment Act rating from four to one. In the new CRA regulations, federal bank and thrift supervisors made it easier for lenders to bring their imagination and creativity to good use in community development, eliminating the most burdensome of CRA reporting requirements while assuring that safety and soundness standards are met. Missouri Bank and Trust became involved in low-income housing development in the Westside after the bank's CRA officer, James Goetz, was introduced to Jerry Shecter, executive director of the Westside Housing Organization, at one of these community lenders luncheons. I am pleased to say that our Division of Compliance and Consumer Affairs regional office here in Kansas City has supported these luncheons since its inception because we view them as important in establishing partnerships between bankers and community groups.