Heartland Financial USA Inc. or HTLF, a bank holding company based in Dubuque, Iowa, offers a home improvement loan product for low and middle income homeowners through its 11 chartered units in 12 states.
This fixed rate installment loan is secured by the borrower’s primary residence. It has a term of 60 months with dollar amounts between $ 5,001 and $ 14,999.
“This is another way we can help the communities we serve,” said Brian Jensen, senior vice president, segment marketing director at HTLF. “We know that many of the larger national banks have announced that they will cease some loansto withdraw some credit, but we are actually doing the opposite. “
Allowable property values vary based on zip code and low or middle income segments.
Home improvement activities have been on an upward trend since the pandemic began, aided by several converging factors, including the expected increase in interest rates over and over the next two years House prices and the long term Inventory shortage.
According to BuildFax, the existing maintenance volume – along with the remodeling, a subset that includes renovation, additions, and change activities – increased year-on-year for each of the past 12 months.
In July, maintenance activities increased by 10.19% and renovation by 12.31% compared to 2020. Funds spent on maintenance in July increased 29.26% year over year, while for the remodeling subgroup they increased 31.24%.
This uptrend is unlikely to slow down. The average tenure an American spent in their current residence hit an all-time high of 10.62 years in June, according to the First American Potential Home Sales Model.
“A number of factors help homeowners stay in their homes longer, including seniors who are aging in place, some homeowners feel attached to their homes, and homeowners are scared of selling because there is nothing better for them than buying it on a limited stock market, “said Mark Fleming, chief economist at First American, in a blog post.” Year-over-year, homeowners lived in their homes by 3.8%, resulting in about 160,000 fewer potential home sales . “
Annual growth in home renovation and repair spending will reach 8.6% by the second quarter of 2022, the Common Center for Housing of the second quarter of Harvard University’s Leading Indicator of Remodeling Activity Index.
“Residential remodeling is likely to grow faster given continued strong home sales, rising house prices and new residential construction activity,” said Chris Herbert, JCHS Managing Director. “A significant increase in building permits also suggests that owners will continue to invest in larger discretionary and replacement projects.”
Annual home remodeling spending is expected to exceed $ 380 billion by mid-2022, added Abbe Will, associate project director in JCHS ‘Remodeling Futures Program.
This program is available at all 11 charter banks of the HTLF, and each keeps the loan in its own portfolio.
“This isn’t the only thing we’ve done, but it’s just another part of a broader strategy to truly serve the communities we serve and make sure we have credit products for everyone,” Jensen said.
HTLF set up a Buy Local Loan earlier this year that offers up to $ 5,000 in loans for unexpected expenses while shopping locally to help small businesses.