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When property values began to drop significantly in Des Moines in the 1980s, a change needed to be made.

“The response was a need to improve the housing stock in Des Moines neighborhoods,” said Holly Olson, executive director of Neighborhood Finance Corp.

In order to take the traditional commission structure out of lending to spur recovery, remodeling and buying in Des Moines neighborhoods, the not-for-profit NFC was created.

“Our structure is like a three-legged stool,” Olson said. “One leg is the neighborhood residents. Another is the city and county governments. And the third is the banks that invest in our loans.”

Every year NFC receives at least $1 million from the city of Des Moines and Polk County through a 28E agreement to fund forgivable loans (a loan that does not have to be repaid).

Olson explained the two-part advantage of NFC’s loan service through an analogy of a tandem bike. “It works like a bicycle built for two,” Olson said. “The first seat is a traditional loan that you have to repay. The second seat is a forgivable loan, and everybody gets a tandem bike.”

Since its establishment in 1990, NFC has originated over $154 million in loans and grants. Approximately two-thirds of the home buyers who use NFC’s services are first-time home buyers.

The NFC mission statement says that it “provides unique lending programs and related services to facilitate targeted neighborhood revitalization in Polk County, Iowa, through partnerships with residents, governments, community-based organizations and the business community.”

Capitol East, Capitol Park, Carpenter, Drake, Drake Park, Douglas Acres, Fairground, King Irving, Merle Hay, River Bend, South Park and Waterbury are the Des Moines neighborhoods served by NFC.

Other programs offered by NFC include a home buyer education program, a closing class and a tool lending library.

NFC launched a new program in September through which it will purchase several homes in select neighborhoods to refurbish and help spark a renewal in the area.

“We plan to buy houses in clusters, in high-traffic neighborhoods, fix them and sell them,” Olson said. “The idea is people will see things happening in these neighborhoods.”

One home has been purchased by NFC, and Olson said the organization has made an offer on another.