On Friday, Nov. 10, Raccoon Valley Bank of Perry purchased three mortgages for Habitat for Humanity. The mortgages that Raccoon Valley Bank purchased will allow Habitat for Humanity the funds they need to build and repair the three houses.
This wasn’t the first year the bank has been involved with Habitat for Humanity. According to Tod Ellis, Chief Credit Officer, in 2016 the bank donated $1,500 and in 2107 they donated $15,000 from the Bank’s Foundation. Many of the bank’s employees also helped in renovating the houses in Perry.
According to Omar Padilla, Dallas County Outreach Coordinator, Habitat for Humanity has grown so large that they now have had to turn to banks to buy the mortgages for immediate cash-flow.
“Habitat, over its 30 year history, has built and sold over 300 houses,” Padilla said, “so they have a portfolio of so many mortgages -350 mortgages - and at one point that was enough, getting the mortgage payments every year so that we could build a new set of houses.”
The three mortgages won’t go directly into the Dallas County area, instead, they will go back into the Greater Des Moines area due to the lack of mortgages to sell in the county. Padilla hopes that the Dallas County partners will be able to help leverage the mortgages when they do become available.
“It’s a little tricky because Greater Des Moines (Habitat for Humanity) is the umbrella that helps us manage the administrative, financial, legal matters,” Padilla said, “so the money that they are helping free up is in turn helping Dallas County. Not in that direct way that you would if you were buying Dallas County mortgages, but that’s because we don’t have them yet. At some point we will and now that we have that relationship, our hope is that they would even prefer to purchase those Dallas County mortgages.”
If it weren’t for the banks or the other financial partners, it could take Habitat for Humanity many years to cover the cost of the mortgage.
“Our recent purchase of three mortgages from Habitat will allow them to build three new homes through these funds, instead of waiting up to 30 years for monthly payments from the borrowers to fund new homes,” Ellis said. “Also due to the fact that the mortgage loans carry zero interest charges, by purchasing these mortgages, Raccoon Valley Bank will continue to donate ‘in kind’ approximately $5,000 per year by foregoing normal interest on the loans.”
Even though the mortgages weren’t purchased directly for Dallas County, Padilla and the Dallas County serving committee have big goals in mind for the upcoming year.
“We are hoping to build one new house and sell it to someone here in Perry,” Padilla said. “We are also continuing to do our home repair program. We are going to do an event here in Perry like we do every year, we are going to do an event in Dallas Center- most likely- and probably go with something on the west side of the county like DeSoto or Van Meter. We try to rotate the communities because one of the things I want to make sure that people know, is that this is a county-wide effort and we’re going to come around.”