NEWPORT — Residential property in six riverside cities may soon become easier for some to obtain.

        Southbank Partners and Brighton Center, two of the key players in the redevelopment of Northern Kentucky's river cities, have joined forces to start a fund to provide mortgage loans for affordable housing.

        The Southbank Fund, a new corporation that has applied for federal 501(c)3 nonprofit status, is intended to revitalize the lower- and moderate-income neighborhoods in Newport, Bellevue, Dayton, Fort Thomas, Covington and Ludlow.

        “We want to be able to enhance the housing opportunities in the six cities, to provide opportunities that might not be available to some people through conventional bank mortgages,” said Wally Pagan, president of Southbank Partners and the president of the Southbank Fund.

        The fund will charge market rates for the mortgage loans, just as a bank or mortgage company would do. But Mr. Pagan said that the fund will be able to provide a first mortgage for a homebuyer and also provide a rehabilitation component.

        “Generally, banks will work with a first mortgage or a rehab loan, but they won't do both for the same home buyer,” he said. “We are not a bank, and we can do both.”

        Mr. Pagan said the fund is seeking $2 million in low-cost capital to lend, as well as $200,000 in annual operation expenses. Area banks will be the major source of funding, he said.

        To help as many people as possible, leverage the capital and keep the fund liquid, the board of directors will sell 90 percent of the first mortgages to local institutions and other investors, re-lending the proceeds to new borrowers.

        The Southbank Fund board of directors includes Tim Rawe, president and CEO of Fifth Third Bank Northern Kentucky; Gary Bricking, vice president of First National Bank of Northern Kentucky; Wayne Carlisle, president of Carlisle Construction and the man who brought the World Peace Bell to Newport; and Michael Mangeot, CEO of Century Construction Inc. William Vermillion, president of The Vermillion Company in Florence, will serve as the fund's executive director.

        Bob Brewster, executive director of Brighton Center, said the Southbank Fund “gives us the ability to earmark funding for affordable home ownership, a major ingredient in bringing back the old river cities. We can make loans that will encourage home ownership, loans that will encourage the river communities to do what needs to be done ... redevelopment of our urban areas.”

        Brighton Center, the largest community development and service agency in Northern Kentucky, will provide home ownership counseling to people obtaining mortgage loans through the fund.

        “We have a full-time counselor to help the people who will be getting these loans, and we expect to bring other counselors on board,” Mr. Brewster said. “There are a lot of people who don't have credit, don't have a history of home ownership. We will work with them to get everything put together.”

        The Southbank Fund will target principal customers — low- and moderate-income home buyers who are looking for homes under $100,000 after rehab, and homeowners who wish to improve their properties.

        The fund will target specific census tracts in each city. Forty percent of the money will go to loans within those tracts. The other 60 percent will be available to anyone in the river cities.

        Mr. Pagan said if capitalization is accomplished in the next two to three months, the Southbank Fund could make its first loan by May.

        Southbank Partners is a nonprofit organization formed by a group of Northern Kentucky civic and business leaders in 1997 with the expressed purpose of an economic development agenda to attract new investment that creates jobs and economic opportunities in the six river cities.

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