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Bank Uses Bailout Funds to Help Its Builder Customers
In a refreshing change of pace for the nation’s beleaguered banking industry, Citizens South bank in Gastonia, N.C. last week garnered some favorable press and a spot on MSNBC for its efforts to help its home building customers.
Citizens decided to take the $20.5 million in bailout funds it had won from the Treasury Department to offer below-market mortgage rates with no closing costs to consumers who would buy a house, or a house lot, from builders and developers who had borrowed money from the bank, columnist Steven Pearlstein reported in the Feb. 11 Washington Post.
“As we see it, it’s a win-win-win situation all around,” Kim Price, the president of the 104-year-old community bank, explained to the Post.
“The builders and developers win by having a tool to help move their unsold inventory,” Pearlstein reported. “The consumer wins by getting a cut-rate loan. And Citizens wins because it lowers the risk that it will have to write off even more of its commercial loans while taking a modest step to help stimulate the local economy. And, of course, the public relations bump isn’t bad either.”
Pearlstein wrote that he was struck by Price’s attitude in talking of the new program. “He’s enough of a profit-making businessman to know that when the government is offering 5% equity money, he’d be a damn fool not to take it, even if his bank is already well capitalized. And yet he’s sensitive enough about the obligation that he feels comes with taking taxpayer money that he was anxious to use it in a visible way to benefit his community and his customers, as well as his shareholders.”
Citizens remains profitable, never got into subprime lending or 100% loans and its nonperforming loans are less than half of 1% of all its loans, the Post reported.
To link to an NBC Nightly News segment with news correspondent Roger O’Neil and Price, click here.
 Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit – including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
“The new tax credit provides a great opportunity for first-time home buyers,” said NAHB Chairman Joe Robson. “Combined with today’s near record low interest rates, the large selection of homes on the market and very competitive pricing, the tax credit should provide the extra incentive needed to get prospective buyers who have been sitting on the fence into the market.”
Industry professionals are encouraged to highlight the tax credit Web site when marketing to their potential first-time home buyer market.
 Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Spring NAHB Construction Forecast Conference & Webcast on Thursday, April 23 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.
 Want to Know the Housing Starts Through 2017?
Find out in HousingEconomics.com's Long-Term Forecast.
Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.
To learn more, visit www.housingeconomics.com.
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