United Through Community
Small local lenders such as NorthStar Home Loans cater to their communities, and not just through mortgages. The Putnam, Conn.-based company makes it a point to expand its outreach beyond the client level.
“In a small business like ours, we’re essentially helping out our neighbors. Locally owned businesses treat people like people, not transactions,” said Jason Verraneault, Northstar’s owner and founder. “What makes us different from a larger lender or online platform is that we’re in the business of building lifelong relationships where my clients will one day refer their kids to us.”
Verraneault’s company is in the northeast corner of Connecticut, known as the Quiet Corner. It’s in the state’s least populous county, Windham County, where the poverty rate sits around 11.5%, per 2020 records.
Verraneault says that the county allows USDA guidelines, meaning that no credit score is needed for a loan.
“We accept down to whatever is allowed by the FHA, which accepts as low as a 500 credit score and 10% down. Most lenders cap at a 620 or 640 score,” Verraneault said. “And with USDA guidelines, we have to work with our customers to help them find nontraditional tradelines for their payment history to prove that they’re fit to own a home.”
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Denise Lanouette, a mortgage consultant at Hartford, Conn.-based First World Mortgage, says that even though her company has multiple branches across the state, community is still at the core of its foundation.
“Because we’re a local lender, I have a whole network of local trusted financial experts, real estate agents, attorneys, inspectors, and contractors who have worked in these local areas in the past and who I feel confident recommending to customers,” she said. “Local lenders offer personalized service that extends outside of “bank hours” – they are often available evenings and weekends to keep momentum and maintain great communication.”
Like Northstar, Lanouette says that First World partners with local organizations such as the Connecticut Housing Finance Authority.
“We pair with these groups to run workshops and seminars designed to inform potential first-time homebuyers about the fundamentals of financial wellness and the mortgage qualification process,” she said.
And Lanouette says it’s not just customers who care about their lenders being local: it’s real estate agents, too.
“A huge reason why real estate agents prefer local lenders to online lenders is because of a combination of their local relationships, their reputation, and accountability,” she said. “People want to do business with people they know, like, and trust.”