Tag Archives: mortgage

Homes for Heroes

June 20, 2013 by
Photography by Bill Sitzmann

When mortgage loan officer Michael Petrovich with The Private Mortgage Group in Omaha was offered the chance to work with the national Homes for Heroes program, he says it seemed like a perfect opportunity to show his thanks to those we depend on.

The program—which uses the tagline ‘Service Deserves Its Rewards’—offers discounts on real estate-related services to active and retired military, police officers, firefighters, teachers, and other civil servants that serve our communities and our country.

“My dad was a fireman for years with the Omaha Fire Department, and a good friend of mine’s dad is a retired Omaha police officer,” Petrovich says. “I also have a lot of friends in the military. [The program] sounded like an opportunity to help out a lot of friends and family, and this was an area I felt I could really make a difference…saving them some money when buying a home.”

Petrovich says as a Homes for Heroes affiliate member, he offers “hero” homebuyers free home appraisals, which are often required for home purchases and refinances handled by his firm. Waiving the fee saves the homebuyer $400. Fellow Private Mortgage Group employees Pete Coen and Jeremy Wilhelm are also affiliate members.

“[The program] sounded like an opportunity to help out a lot of friends and family, and this was an area I felt I could really make a difference.” – Michael Petrovich, The Private Mortgage Group

“We can offer the discounts to any qualifying client in the Omaha/Fremont territory we cover. All they need to do is sign up on the Homes for Heroes website, and it directs them to all the affiliates in the area,” Petrovich explains.

Real estate agents make up a large number of HFH affliliate members nationally. Locally, Prudential Ambassador Real Estate agents Michelle Gustafson, Gary Gernhart, Mamie Jackson, and Matt Anderson are affiliates. “We know the agents [at Prudential], and we’ve worked together to offer clients the HFH discounts. It’s been a team effort,” Petrovich adds.

The Homes for Heroes program was first created in 2002 by a group of lenders and Realtors in Minneapolis in response to the tragic events of 9/11. Petrovich was among the first Homes for Heroes affiliate members in Nebraska, joining in November 2012 when the program first launched in Omaha. The 501(c)(3) nonprofit, comprised of Realtors, lenders, and other real estate-related service providers, now has approximately 750 affiliates nationwide serving homeowners in 44 states.

Steve Minino, a Realtor with NP Dodge Real Estate, is another Homes for Heroes affliate in Omaha. Along with Realtors Deb and Mark Hopkins (all part of the Hopkins Home Team), Minino got involved when he learned about the program on the local news.

“We saw the advantages right away and jumped on board…being able to help our local heroes while getting some great exposure for us,” he says. “It was definitely a win-win situation.

“My family also has a long tradition of members serving in the Marine Corps. We liked the idea of helping out family and friends who serve and who could really benefit.”

“We saw the advantages right away and jumped on board…being able to help our local heroes while getting some great exposure for us. It was definitely a win-win situation.” – Steve Minino, NP Dodge Real Estate

As an affiliate, Minino says he offers 25 percent of his sales commission back toward the purchase process for Homes for Heroes clients. “This money is typically applied toward the closing costs being paid by the homebuyer,” he says. “If the buyer is not responsible for closing costs, then the money is donated to a charity of their choice.”

Minino also donates another five percent of his commission directly back to the Homes for Heroes organization, which they use to fund other projects, including the rehabing of homes to accommodate injured veterans.

“We’re currently working with several Heroes clients, and we hope to grow that number in the next six months or so.”

Millard Public Schools teacher Stephanie Poltack and her fiancé, Aaron Mackel, recently purchased a home together in West Omaha and took advantage of discounts offered by several local Homes for Heroes affliliates. “My Realtor, Judy Kramer with Prudential, told me about [Homes for Heroes] and referred me,” Poltack says. “Through the program, we received closing-cost assistance and got a discounted home inspection, and The Private Mortgage Group gave us a free home appraisal. I believe we saved $1,325 in all.

“Being a first-year teacher and a first-time homeowner, I’m very appreciative of all the help we received…It meant everything to us,” Poltack adds. “We were able to use the money saved to go out and buy a washer and dryer. It’s a great program, and I think if more people were aware of it, more would take advantage of it.”

“Being a first-year teacher and a first-time homeowner, I’m very appreciative of all the help we received…It meant everything to [my fiancé and me].” – Stephanie Poltack, teacher

Nationally, several media outlets and Hollywood celebrities have helped publicize the good works being done by Homes for Heroes’ affiliates nationwide, including Sean Hannity with Fox News, actor Gary Sinise, and the Orlando Magic basketball franchise. However, the nonprofit has grown primarily through word of mouth via the internet and news media.

Petrovich says one of the goals of the Omaha-area affiliates is to raise awareness of the Homes for Heroes program in Nebraska and encourage participation by our local heroes.

“We’re getting together to discuss ways to advertise,” he said. “We’ve placed ads in the Fremont paper, hung posters in firehouses and around town…We want our civil servants and military to know we support them and say thank you for serving our country and our community.”

Strict Banking Requirements

May 25, 2013 by
Photography by Bill Sitzmann and Great Western Bank

With interest rates having been at all-time lows for over a year and forecast to remain at record lows for the foreseeable future, it’s likely that either you or someone you know has refinanced their home recently. But does the same hold true for commercial building owners? Have business owners and those with commercial leases been able to take advantage of such low rates? Have entrepreneurs seeking new loans been able to set their dreams in motion, even in these tough economic times?

According to Gary Grote, Omaha group president for Great Western Bank, while commercial loans may not have been impacted by the low rates as much as residential loans have, there still has been a significant effect in the commercial market.

“The difference between residential and commercial is that in the commercial loans…there may be pre-payment penalties that apply until the maturity day,” explains Grote. “So you can’t always just pick up the phone and…refinance on a whim like with a residential mortgage.” He does add that though it may not be as “easy” to refinance a commercial loan, “many people have already taken advantage of the low rates…and we continue to see opportunities.”

Craig Lefler, senior vice president and manager of commercial banking with Mutual of Omaha Bank, agrees with Grote, saying while there may be a few more obstacles for commercial loans to be refinanced, there are still ample opportunities for businesses to seek lower interest rates on existing loans. “A lot of commercial real estate loans are done by banks on a five-year type of basis and some of those, depending on the bank, may have a penalty for early payoff. That would certainly be a consideration for [when it comes to the] cost of refinancing the loan.”

“The difference between residential and commercial is that in the commercial loans…there may be pre-payment penalties that apply until the maturity day.” – Gary Grote, Great Western Bank

Both Grote and Lefler say that although rates are at historic lows and there are many opportunities available for commercial loans to be granted as well as refinanced, the process and underwriting standards are higher than ever.

“After the financial crisis, credit certainly tightened up and [banks] returned to more prudent, conventional underwriting standards,” says Grote.

Lefler agrees that there are more stringent standards and more in-depth analyses today than in the past. However, those are countered by the benefit of lower interest rates. “It’s a mixed bag,” he says.

Interest rates for commercial spaces are different than those for residential mortgages. Grote explains that the typical five-year loan originated from the trouble that the Savings and Loans went through in the 1980s. The S&Ls offered CDs for two to four years at fixed rates. They then would loan money at fixed rates for 10- or 15-year loans. “When the rates went up, they got burned because their cost of money increased but their loans were at a fixed rate.”

He shares that banks typically keep five-year commercial loans on their balance sheets while traditional home mortgages are sold off to other organizations.

“A lot of commercial real estate loans are done by banks on a five-year type of basis and…depending on the bank, may have a penalty for early payoff. That would certainly be a consideration for [when it comes to the] cost of refinancing the loan.” – Craig Lefler, Mutual of Omaha Bank

As another option, Grote says that some banks, such as Great Western, may offer certain clients 10– and 15-year fixed rates. But he says that this is a unique situation.

Thirdly, he shares that the Small Business Administration has a popular product called the SBA 504 Program, in which a portion of the loan allows the borrower to do a 10- or 20-year fixed rate. “So there are options out there, and it just kind of depends on the property and the borrower and where they’re at in their life cycle and what makes the most sense for them.”

Depending on whether the loan is for owner-occupied real estate or investor real estate, Grote explains that the lender will underwrite the occupant’s financial statements or the investor’s ability to rent space. Both men recommend that businesses have their financial records in order and ready to be submitted for review.

“Be organized and be able to quickly produce their financial statements in an organized fashion,” says Grote. “That helps banks respond quickly and be able to give good guidance and good answers.”

Lefler adds that, in addition to the financial records, the lender will also consider “the projection, going forward, of how the space will be used and ultimately, from the lender’s point of view, will the debts get repaid.

“My sense is that there is a feeling that banks are not willing to lend money on new business ventures and to projects like this, but I would say that this is not true,” says Lefler. “In our market, which is stable, banks play an active role in these spaces on a daily basis.”