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April 1994

State Roundups
Wisconsin

Bank's no-money-down loan stokes county housing market

Take a county population that is about 80 percent low and moderate income, add home sellers who sometimes wait up to three years for a buyer, and the result is a stagnant housing market. That was the scenario in tiny Florence County until the State Bank of Florence stepped in with its no-down-payment home loan program.

Only Florence County residents who are first-time home buyers with an excellent credit rating are eligible. In addition, applicants must purchase an existing home, and mobile homes do not qualify.

The bank has committed $500,000 to the program, and with the average value of a home in Florence County running about $25,000, that money will go a long way, says Warren Sibley, the bank's executive vice president and chief loan officer.

The bank charges the usual costs associated with a home purchase. "If they can't come up with the $500 or so to cover the closing costs, they're not going to meet their monthly payments," Sibley says. The bank also charges about one-half percent more than the posted mortgage rate for the no-down-payment loans, but holds that rate for three years before it balloons.

While the loan program was originally launched to answer the housing needs of the community, Sibley says it also serves as one way to satisfy the bank's CRA (Community Reinvestment Act) obligations. At the same time the loan program is ensuring long-term customers for the bank, Sibley says. Since last November the bank has made seven loans.

What may work in Florence County, though, may not work elsewhere. Located in the northeastern corner of the state, the county has a population of 4,500, and Sibley says the bank knows everyone. "One reason why this program will work is that we know who's going to pay and who isn't," he says.

Blair farmers pitch lamb use via frozen food line

In view of a 13 percent decrease in the 1993 U.S. lamb crop from the previous year and dwindling American lamb consumption, a Blair family is doing its part to reverse that trend with a line of consumer-ready products.

Sue and Bob Howard, whose farm is midway between Eau Claire and La Crosse, created ready-to-cook marinated lamb products, called Lambo's. "We're hoping that this will give us some profit, but the big thing is to promote lamb," says Sue Howard, who concocted the recipes and prepares the lamb at a meat locker facility in a nearby town.

The Howards have watched the profits on their 70 or so sheep decline over the years. "The price of wool didn't even cover the cost of this latest shearing," Sue Howard says.

Mark Stevenson, a meat safety consultant with the Wisconsin Department of Agriculture, Trade and Consumer Protection in Altoona, who helped the Howards get their business off the ground, says he's seen an increase in direct sales of meat and produce in his region. Finding a market niche "puts [the Howards] one step ahead of the game," Stevenson says.

The frozen products—marinated lamb kebabs, teriyaki lamb, fajitas and sir-fry lamb, with recipes included—have been placed with three area grocers, and ads in a local shopper have brought direct sales. "I can't say it's been a money maker, but it has sparked some interest in lamb," Sue Howard says. "Some people were just happy to find a place to buy a whole lamb."

Although the impact of an operation like the Howards' may be small, every little bit helps the producer, says Dean Henderson, professor in the Animal Food Sciences Department at University of Wisconsin—River Falls, who expects the sheep industry to continue its decline. "It gets harder for large sheep producers to make a profit." But he gives the small sheep raisers more of a chance, by finding their niche markets and doing such things as pooling lambs to cut down on shipping costs. Because the Howards' business has low capital input, Henderson says, it has a greater chance of success than would a larger operation.

To meet anticipated year-around demand for Lambo's, the Howards are working to stagger lambing, which traditionally occurs in spring. And down the road, Sue Howard says, maybe a group of area sheep raisers could form a co-op. "Then we could supply a bigger market, but for now, if we could just sell our own ...."

—Kathy Cobb