A Homebuyer’s Dream

First Financial Bank’s Sherry Holden serves homebuyers of every means, even humble ones

By Tam Harbert

Sherry Holden remembers her first home-buying experience. She and her husband were buying a condo in the early 1980s, when inflation was raging and interest rates hovered around 14 percent. Holden thought they should try to get bond money, which carried only a 10 percent interest rate, but the loan officer said bond money was not allowed for condos.

A friend in the mortgage business told her something different, however: The loan officer had the power to receive a waiver for that particular requirement if he wanted. But he hadn’t even mentioned it.

“I went back and asked the loan officer, who looked at me, sighed and then agreed to request a waiver for the requirement,” she says. “I remember thinking, ‘Why didn’t he offer it initially? That should’ve been his job.’ ”

That sort of thing doesn’t happen to Holden’s customers at First Financial Bank. The 79-year-old community bank, headquartered in El Dorado, Ark., operates in an eight-state area of the southern United States, with branches in Union County, Ark.; Senatobia, Miss.; and Carthage, Miss. In addition, the bank has four mortgage loan production offices in Arkansas—Fort Smith, Jonesboro, Little Rock and North Little Rock—and 11 agricultural loan production offices across the South, from Nacogdoches, Texas, to Goldsboro, N.C., that generate a large number of agricultural loans, particularly to poultry farmers.

However, mortgage lending is First Financial’s second largest lending activity. As a common culture, the $835 million-asset community bank prides itself on reaching out to low- and moderate-income homebuyers, people who often need extra time and attention taking unconventional paths to the American dream. The bank works with Habitat for Humanity, offering both loans and financial literacy classes to those buying their first homes.

“Habitat recipients are from generations of renters,” explains Jan Fleming, First Financial’s vice president of compliance and CRA officer. “They don’t understand that if the plumbing leaks, they have to fix it, not call the landlord.” The literacy classes help to educate them on the responsibilities of home ownership.

Holden is a golden example of just how far the bank’s commitment goes in guiding homebuyers of all financial circumstances, and steadily generating a profitable book of mortgage business along the way from all of its loans. As manager of the bank’s Fort Smith loan production office, Holden handles loans in Sebastian and Crawford counties, two areas with a significant proportion of low- to moderate-income families.

The median income in these counties is $48,400. In some areas, however, 20 percent of the population lives below the poverty level, and in one U.S. Census tract, more than 40 percent of the population is below the poverty level, says Fleming, citing Federal Financial Institutions Examination Council 2012 Census data reports.

Beyond the basics

All mortgage officers understand that their basic role involves determining whether their customers qualify for a loan. However, Holden takes the credit process much further. “We don’t just tell them, ‘No, we can’t do it,’” she says. “We tell them, ‘We can’t do it now, but we might be able to do it in the future, and here’s how you can prepare.’ ” For example, if the customer needs help either establishing credit or improving it, Holden sends him or her to the Crawford–Sebastian Community Development Council (C-SCDC), which offers free financial counseling.

And if anyone can find a program that will help a person or family qualify for a mortgage, Holden can. She has an encyclopedic knowledge of a host of programs, ranging from state programs like the American Dream Down Payment Initiative, which offers forgivable loans; to Help Funds from the Federal Home Loan Bank; to the Mortgage Credit Certificate, a federal program that can help anyone from the low-income category up to the middle class. (In Arkansas, the MCC program, sponsored by the Arkansas Development Finance Authority, allows qualified buyers to receive up to $2,000 a year as a dollar-for-dollar federal tax credit, effectively reducing the interest rate on the mortgage, Holden explains.)

Each of the programs has different requirements in terms of things like sources of income and who is allowed to live in the home, and their requirements often change. This can make putting together a loan using those programs a complex task. “Every loan is an individual puzzle,” says Holden, unique to each customer depending on his or her financial situation and the rules of particular programs.

Not only does she take the time to research a borrower’s financial circumstances and potential, Holden also spends the time to keep up on the requirements of each homebuyer-assistance program. “We actually have a little spreadsheet to keep abreast of everything,” she notes.

Holden’s diligence results in more loans to more low- to moderate-income folks. Over the last year, 31 percent of the loans she made went to such families. And she has signed up more borrowers for the MCC program than any other loan officer in Arkansas since the program’s inception in 2011.

What’s even more impressive is that Holden is relatively new to mortgage banking, joining First Financial only nine years ago at the age of 48. Previously, she spent 30 years helping her parents run a small-town homebuilders store, doing everything from sales to payroll to taxes. When the store went out of business, Holden’s brother and president of First Financial’s mortgage banking, Rod Beckham, suggested that her financial skills made her well suited to banking. He hired and trained her to run the new Fort Smith office.

Holden’s knowledge of programs initially grew out of necessity, Beckham says. As a new lender in the area, the bank “had to know about every program possible in order to be competitive in the marketplace,” he explains. But it wasn’t long before she was “awestruck” by the rewarding feeling of having helped someone buy a first house, he says. That fueled her passion to help anyone she can—regardless of that person’s level of wealth—enjoy the personal and financial rewards of homeownership.

A long-term view

Holden’s diligence pays off in increased business for the bank, although perhaps not always right away. “If they can’t buy today, they are probably going to be able to buy in the future,” she says. One of her first mortgage loans was a long process, but the time investment paid off eventually for the bank. Holden had worked with the customer for over a year, and just when his credit and finances were in good enough shape to qualify, his employer transferred him to another town an hour away.

The man appreciated her help so much, however, that when he bought a house in his new town, he still came to her for his loan. And, like so many other mortgages to people of modest means, that loan is a profitable one to First Financial.

But for Holden, knowing that she has helped someone buy a home is just as important and rewarding. For example, several years ago during the process of helping a young woman get a loan for her first home, Holden learned that the woman’s younger sister was attending the University of Arkansas in Fort Smith. Holden mentioned a C-SCDC savings program specifically designed to help fund the cost of attending the university by matching each dollar saved for tuition with an additional three dollars toward the expense.

The younger sister eventually graduated, found employment as a registered nurse and came to Holden for her first home mortgage as well.

Yet, it wasn’t until recently that Holden found out how much she had really helped that family. At an annual luncheon held by the C-SCDC, Holden was surprised to see the sister making her way to the podium. Once there, the woman explained how Holden’s mention of the C-SCDC’s tuition-matching program led to her participating in that program. The woman wept as she told how the tuition program was instrumental in allowing her to stay in school and graduate on time.

“I had no idea,” Holden says of the woman’s personal story. “She had never said anything to me about it. But that day I realized how much it had impacted her.”

Tam Harbert is a writer in Rockville, Md.