Stephanie Preusch is in her second stint at the Neighborhood Finance Corp., a 26-year-old nonprofit that provides loans for the purchase and rehabilitation of homes in low-income neighborhoods in Des Moines. Since 2008, a subsidiary, Neighborhood Properties LLC, has purchased lots in various neighborhoods and built new homes at prices well below average house prices and has rehabilitated abandoned properties. 

Preusch was the fourth employee in the door when Neighborhood Finance opened in 1991. She started out as a loan originator. At the time, she also was a graduate student at the University of Iowa focused on urban renewal planning. “This was a good fit,” she said. 

Neighborhood Finance made its first loan in 1991 for a home improvement project in Beaverdale. In 1996, Preusch left the organization but continued to work in lending through the affordable housing loan programs for what is now U.S. Bank and the Federal Home Loan Bank of Des Moines. From 2005 to 2011, she was executive director of the Iowa Home Ownership Education Project; then she led an analytics reporting team at Wells Fargo Home Mortgage that worked with the federal Making Home Affordable program. In 2014, she returned to Neighborhood Finance as its executive director.

As of October 2015, Neighborhood Finance reached $300 million in loans and grants and had helped more than 5,600 households. Among major projects this year, the organization is working with Community Housing Initiatives to acquire, rehab and sell 15 homes in the Viva East Bank neighborhoods, and it will be a key player in efforts to establish a Des Moines Land Bank that would acquire, manage and sell vacant and blighted properties. Neighborhood Finance plans to loan another $15 million this year.

How will Neighborhood Finance fit into the Des Moines Land Bank program?
All the areas the Land Bank is currently proposing to work in are in the NFC lending areas, so at this time we do not expect an expansion of our lending areas based on the Land Bank.  Neighborhood Finance Corp. believes that the Land Bank, as it is being discussed, will further neighborhood revitalization by removing blighted properties that cannot be renovated, providing for the opportunity to renovate properties that are currently caught up in the tax sale and nuisance processes, and provide land for infill construction.  

NFC Properties LLC views the potential Des Moines Land Bank as an entity that will streamline the process through the actions being asked of the city and the county, and developing expertise to deal with issues related to clearing the title so the property is available for development/renovation and resale. Right now, agencies are tackling these issues on an ad hoc basis; it would be more efficient to have the Land Bank resolve the issues, and then make the land available at a reasonable cost. 

How much had the organization changed when you returned?
Not very much, and that is the success of it. We know what we do, and we do it as well as we possibly can. We have fine-tuned how to do it better. The product has changed some to meet the needs of borrowers so we can lend in the neighborhood we want to lend in. But we stay in our lane, and it helps that we are a nonprofit. Wells Fargo offers the same product we offer with a forgivable loan. Bankers Trust has some rehab products, so people can get a loan with rehab. But we focus on the poor neighborhoods of Des Moines.

You were away from the organization for nearly 20 years; there had to be some changes.
One great change that was made in the interim is that we used to have borrowers put 5 percent down, then they would have to get private mortgage insurance. And that became very difficult during the mortgage meltdown. So we developed a product where the borrowers put 5 percent down, then we lend them the 15 percent.

Are you planning any new programs?
We are going to roll out an exterior repair program. We have a total of $2 million at lower interest rate and with expanded credit guidelines for people who can’t qualify for our core product. The maximum interest rate will be 4 percent, and the loan can be used for exterior repairs up to $25,000. We’re going to offer this in all lending areas; there won’t be any income requirements.

What is the attraction of nonprofit lending?
My joke is that I’ve never been at a company as a moneymaker. Even at Wells Fargo, I was working on loss mitigation.