Business Spotlight: Heartland Funding Corp.

When Robert Baltzell and James Bush decided to found Heartland Funding Corp in 1997, they knew they wouldn't have any shortage of competitors. After all, plenty of banks and companies in the area handle home mortgages. However, they believed Springfield needed a company like theirs.

If growth is any indication, Baltzell and Bush were right. During the past six years, Heartland Funding Corp. has grown from a small start-up with five employees into a thriving mortgage brokerage with six satellite offices in five states. The Springfield office and national headquarters at 1442 E. Primrose employs 20 of the corporation's 30 staff.

According to Bush, Heartland Funding has doubled in size every year since the corporation was founded, and Baltzell noted that Heartland Funding closes $7 million to $10 million in loans on a monthly basis.

"We just purchased our own building recently, and we operate corporately in Springfield, not out of another state," said Baltzell, Heartland Funding's president.

Heartland Funding, which currently does business in 11 states, only handles real estate loans, and all of the services it provides are handled in-house, including underwriting and funding loans. Mortgage lending consultants also receive a great deal of training and have the authority to give qualified home buyers instant loan approvals.

In addition to offering conventional, nonconforming, Veteran Affairs and Federal Housing Administra-tion loans, Heartland Funding is a Housing and Urban Development direct-endorsement lender, which means the buyer is approved by Heartland Funding, not HUD. Home buyers who need down-payment assistance also can receive help through Heartland Funding's sister company, Mid-West Housing Authority.

Baltzell and Bush founded Mid-West Housing Authority in 1999 to capture business in what they perceived to be an underserved market low- to moderate-income, home buyers who had little or no money for a down payment. According to Baltzell, people qualifying for assistance do not have to be first-time home buyers. Home buyers can use the program again when they purchase their next home.

"The down-payment assistance program also can be used by other lenders as well," said Bush, who serves as Heartland Funding's chairman of the board and CEO.

Through Mid-West Housing Authority, sellers or home builders who participate in its down payment assistance program pay a service fee of 3.75 percent of the contract sales price. The 3 percent goes to Teen Challenge International, a nonprofit, inter-church related drug treatment program, which then gifts the 3 percent to the buyer, who uses it as the down payment required by HUD. Mid-West Housing Authority retains three-quarters of a percent. Part of that money is then donated to Mid-America Teen Challenge.

"We picked Teen Challenge because it's one of the best organizations we know of that helps people who have a drug problem their success rate is just phenomenal," said Baltzell. "That and we wanted to contribute to a charity that helps people in the local community and throughout the region."

This July, Baltzell and Bush presented Jack Smart, Mid-America Teen Challenge's executive director, with a check for $32,373 from funds Mid-West Housing Authority collected through its down-payment assistance program during the last year and a half.

Teen Challenge International USA's headquarters are located in Springfield, while Mid-America Teen Challenge is based in Cape Girardeau. The program has treatment centers in Branson and Neosho.

Expansion

Rapid expansion, however, can be a double-edged sword. Finding qualified employees in Springfield's tight labor market has been difficult at times. To combat the problem, Heartland Funding's employees receive extensive on-the-job training, said Baltzell.

Communication between Heartland Funding's headquarters and satellite offices also has been a key factor in its growth, and the company uses an intranet computer system to link all of its employees and give them access to the tools they need to write and approve home loans.

When opening new offices, Baltzell and Bush said they tend to target areas where they feel home buyers are underserved. Its locations include Chicago, St. Louis, Wichita, Kan., and Benton and Siloam Springs, Ark.

Currently, Baltzell and Bush are focusing on "controlled growth," which could see them open additional offices in other cities. In the meantime, they said they plan to continue expanding their flagship office in Springfield.

"One of the things we're most proud of is the way we give back to the local economy," said Baltzell.

"A lot of other firms that are headquartered somewhere else take money out of the community. We add a lot to the local economy because we are a local company," he added.