Schenectady Mayor Gary McCarthy has high hopes for KeyBank’s new partner in the Key to the City program.
On Sunday, he announced Prospect Mortgage as the newest Key to the City partner. “We try to round up a partner every month,” he said.
In the year and a half since the program was launched, quite a few partners have been rounded up, including Coldwell Banker, T Bank, NBT Bank, Trustco Bank and a few others.
All work to get people into homes with attractive lending options, but McCarthy said Prospect Mortgage is special. They’re the second largest 203(k) renovation lender in the country.
Most mortgages fund the purchase of a house, but not any renovations, which is a problem in Schenectady.
“We have a lot of distressed properties,” he said.
Normally, a new homeowner would have to secure a separate construction loan on top of a traditional mortgage. The 203(k) loan allows a prospective buyer to get funding for the price of a home plus money to refurbish it — basically a loan for the full price of a livable property.
Other Key to the City partners are able to provide similar arrangements, but McCarthy said other banks might be skittish of rundown properties or take a long time figuring out the process.
“This is [Prospect’s] bread and butter. They’re seen everything and they’re not scared off by challenged properties,” he said.