Commercial Loans:
Multifamily. Home Savings originates loans secured by multifamily properties
that contain more than four units. Multifamily loans are offered with adjustable
and fixed rates of interest, which adjust according to a specified index, and
typically have terms ranging from five to ten years and of the value of the
real estate and improvements (LTV) of up to 80%.
Multifamily lending generally is considered to involve a higher degree of risk
than one-to-four family residential lending because the borrower typically depends
upon income generated by the subject property to cover operating expenses and
debt service. The profitability of a subject property can be affected by economic
conditions, government policies and other factors beyond the control of the
borrower. Home Savings attempts to mitigate the risk associated with multifamily
lending by evaluating the creditworthiness of the borrower and the projected
income from the subject property and by obtaining personal guarantees on loans
made to corporations, limited liability companies and partnerships. Home Savings
requires borrowers to submit financial statements annually to enable management
to monitor the loan and requires an assignment of rents from borrowers.
Nonresidential. Home Savings originates loans secured by nonresidential real
estate, such as shopping centers, office buildings, and industrial buildings.
Home Savings’ nonresidential real estate loans typically have both fixed
and adjustable rates, amortization of up to 25 years and LTVs of up to 80%.
The majority of such properties are located within Home Savings’ primary
lending area.
Construction. Home Savings originates loans for the construction of multifamily
properties, nonresidential real estate projects and to builders on a presold
or speculative (unsold) basis. Home Savings limits the number of outstanding
loans to each residential builder on unsold homes under construction, both by
dollar amount and number. Construction loans for multifamily and nonresidential
properties, as well as loans to builders, typically have LTV at origination
of up to 75% based on estimated value at completion, with the value of the land
included as part of the owner’s equity.
Secured and Unsecured. Home Savings makes commercial loans to businesses in
its primary market area, including traditional lines of credit, revolving lines
of credit and term loans. The collateral coverage ratios for commercial loans
depend upon the nature of the underlying collateral. Lines of credit and revolving
credits generally are priced on a floating rate basis, which is tied to the
prime interest rate or LIBOR. Term loans usually have adjustable rates, but
can have fixed rates of interest, and typically have terms of one to five years.
Construction. Home Savings originates loans for the construction of one-to
four-family residences. These construction loans to owner-occupants are structured
as permanent loans with fixed or adjustable rates of interest and terms of up
to 30 years. During the construction phase, the borrower is required to pay
interest only. These loans have LTVs at origination of up to 95% with appropriate
mortgage insurance.
Consumer Loans:
Home Savings originates various types of consumer loans, including home equity
loans, home equity lines of credit, vehicle loans, unsecured loans, and cash-secured
loans. Home Savings generally does not originate recreational vehicle loans
or marine loans. Consumer loans are made at fixed and variable rates of interest
for different terms based on the type of loan.