NESDCAP and NESDEC - Most frequently asked questions

Topic: Tips for Effective Customer Communication
By: Kelly Weaver, Small Business Development Center Regional Director

Q. One of the most challenging aspects for growing a small business is marketing communications. Literally, how does your company communicate with customers so that they: (a) Know you exist; (b) Know what you do; (c) Have an interest in purchasing from you now and in the future?

A. Business communications are complicated, just like any other form of human communication. Running one ad and expecting it to produce lots of orders is like going on a blind date and expecting to get married...THAT NIGHT! Rarely does it happen, since a relationship takes time to develop. Typically relationships occur through multiple interactions over the course of time. The same is true for customer communications.

The "M-Cubed" method is a great foundation for building your customer communications. This method considers three "M" concepts and follows a specific sequence: Message, Method, and Measurement.
The "message" component suggests the company get very specific and organized about what it wants to say to that customer. If you had the ability to implant five messages directly into the brains of customers, what would they be? This helps ensure these messages are repeated and reinforced in any communications approach you take with the customer. By having well developed and consistent messages in your communications, you put the company in a better position to grow.

Message: Once the messages are well understood, then, (and only then, does it make sense to consider the different ways you might want to deliver those messages. Often, companies reverse the sequence. (i.e.: they select the method they will use to deliver a message - for instance, direct mail or radio - then determine what they want to say). Focusing on the messages first, helps better direct which methods to use to deliver the messages and helps make more profitable decisions.

Method: Frequency and repetition are important so you will likely use more than one method but they will have a consistent message. Don't overlook the ways you communicate with customers on a daily basis (such as answering the telephone, signage, invoices, etc.). Often these methods are not fully used to reinforce the key marketing messages.

Measurement: The final "M" in the process merely suggests to measure the success of different approaches. Since the process is difficult, it is important to study what we do and assess what works and what does not. Your challenge is to observe, learn, and modify your approach accordingly. Measurement techniques can be as formal as entering tracking codes into your order processing system, or as simple as a "tick sheet" you put near the cash register in your business.

Customer communications are never easy, but focusing on message, method and measurement can help you develop a process of informing and educating customers in the way you desire.

Q. Why do you put a mortgage and promissory notes on the property?

A. Under the guidelines for the Federal Home Loan Bank Program (FHLB), NESDCAP is required to place a retention (mortgage and promissory note) document on the property for five years. The mortgage with this program will be with a lending institution other than NESDCAP.

Q. I received a Truth in Lending, what is this for? Do I have to pay this money?

A. A Truth in Lending is required if there is a mortgage placed on your property, even though you do not make payments to the loan. It shows what the estimated overall costs are going to be at final term of the loan. As far as payments - you are obligated to pay based on the terms of the promissory note and mortgage.

Q. What happens to the mortgage and promissory note debt if I need to move into a different living arrangement (e.g. nursing home, assisted living, apartment) or if I pass away?

A. If the mortgage and promissory note are held by a lender other than NESDCAP, the mortgage and note remain on the property until the property is sold or transferred. At that time, the recapture amount is based on the day the home is no longer your primary residence or the day of the death of the person who received the funding. However, if the person purchasing the home is eligible, they may have the option to assume the forgivable mortgage and promissory note, if that option was on the original mortgage and promissory note. The recapture amount is based on the number of years / months that have been forgiven as well as the amount of profit that may be obtained by the previous owner.

Q. What happens if the husband or wife pass away or move out and one still remains in the home?

A. If at the time eligibility was determined both were considered living in the home and now only one of the eligible parties remains in the home as their primary residence, there is no recapture required until the remaining person no longer meets the terms of the mortgage and promissory note.

Q. What happens if the household consists of the parent(s) and an adult child and the parent moves or dies?

A. As long as the child is on the deed of the property and has signed the mortgage and promissory note, there would be no recapture at the time of death or move.

Q. What if the house is owned by the applicant who resides at the home and other parties that do not reside at that home?

A. All parties that are on the deed will be required to sign the mortgage and promissory note. Eligibility will be determined based on the parties that will reside at the home as their primary residence during the time the work is done.

Q. What if the household is owned by the parent and a child or other person(s), but the other parties do not live in the home at the time of eligibility is determined, then the parent moves out or dies and the child / other person moves in?

A. The child / other person will have to meet household income and eligibility guidelines. If they do not meet the guidelines, the property will be subject to the recapture clause.

Q. What if I move out and rent the property out to an income eligible person?

A. If there is a mortgage and promissory note signed you will be bound by the regulations on that mortgage and promissory note. Regardless of who you rent the property to, you will be obligated to the recapture clause.

Q. What if I give my house to my kids or another person?

A. If there is a mortgage and promissory note signed, you will be bound by the regulations on that mortgage and promissory note. Any time you transfer the deed and are no longer on the new deed, the expense provided to rehabilitate your home would be subject to recapture, unless the new owner meets eligibility and will reside in the home. If there is no mortgage and promissory note signed, you have signed an application to NESDCAP which states you may be required to pay NESDCAP the recapture amount if the home is no longer your primary residence within two years of the work being completed. It will be NESDCAP's discretion whether they request the recapture amount be paid.

Q. I am responsible for paying all the bills, taxes, insurance, but I do not own the property, can I be considered the home owner?

A. No, your name will need to be included on the deed for the property before you are considered the home owner.

Q. I received weatherization assistance on my home before. I now need work on my windows and doors, can I re-apply?

A. If you have received weatherization under the Department of Energy (DOE) program after September 30, 1993 our agency will not consider your application for weatherization assistance. Any work that may have been addressed under the weatherization program and now is being requested again, is considered maintenance and is the homeowner's responsibility.

Q. I am married but my spouse is not listed on the deed, will we both have to sign the mortgage?

A. Both husband and wife will need to sign the mortgage and promissory note.

Q. What if I am divorced but do not live with my spouse and my spouse will not sign the mortgage?

A. When the program guidelines require a mortgage be placed on the property, you will not be considered eligible. If the applicant fails to make good on the promissory note, a judgment can be placed on the person.

Q. I have given Power of Attorney to my child / another person, who will need to sign the mortgage, promissory note or the application?

A. If you are no longer capable of signing for yourself, your POA may sign for you. Our agency will need to have legal documentation showing who has the POA.