Huntington Bancshares (Stock Quote: HBAN) is one of the first big banks to dip its toe back into the low-income real estate market — and it’s targeting one state that has really taken it on the chin during the Great Recession.

It’s a move that comes with some risk. Low-income borrowers were hit particularly hard by the economic downturn. A study from Harvard University’s Joint Center for Housing Studies concluded that the average declines for U.S. low-income homes were 50% higher than declines in high-end homes.

And developers who build new homes for low-income citizens are struggling to pay back the loans they’ve already received to build new housing units, especially in the hard-hit Rust Belt.

That disparity in home-value declines and the risk in getting housing development loans paid back by builders represent a heightened risk for banks, but that’s not stopping Huntington from plowing $100 million in low-income loans into the Ohio real estate market by 2012.

The money will go primarily to affordable housing for struggling Ohioans, particularly extremely poor families and senior citizens. The press conference that announced the housing finance deal was held at the St. Rita Senior Apartments at the Jennings Center for Older Adults in Garfield Heights, Ohio. The housing complex, completed earlier in 2010, holds 63 units and is being billed by the bank as a model for the financing program.

Much of the money is going to jump start new housing development projects that were sidelined due to the flailing economy. The bank has already earmarked $3 million to complete a housing project initiated by the YWCA of Canton. The $6.9 million project will offer new homes to homeless people who will pay lower-than-market rents based on their annual incomes. Another $3.2 million is going to finish a $7.2 million family-housing unit renovation in Cadiz, Ohio.

“We wanted to do something very impactful to help jump-start stalled housing," said Reza Aghamirzadeh, Huntington Bank’s senior vice president and director of community development, in an interview with The Cleveland Plain Dealer. "There were a number of critically needed projects in various markets, Cleveland including, that were stalled, that needed investment."

Geographically, the move makes sense for the Columbus, Ohio-based bank, and its investment will be made in partnership with the Ohio Capital Corporation for Housing, a nonprofit group that helps low-income Ohioans to find funding (usually from banks) for homes. The OCCH will help distribute the money to developers seeking financing to either finish new housing projects that ran out of money or who are looking to start new ones.

"Ohio, especially Cleveland, has been hit hard by the foreclosure crisis," said Sen. Sherrod Brown (D-Ohio), who presided over a July 8 press conference announcing the $100 million investment with Steve Steinour, Huntington CEO. "Our economy and our communities cannot recover until every Ohioan has a place that he or she can call home. This critical investment addresses the urgent need for affordable housing, and it also creates jobs and stimulates local economic development."

Ohio’s current unemployment rate is at 10.5%, according to the Ohio Department of Job and Family Services. That’s one of the highest rates in the U.S. In addition, new data from the U.S. Census Bureau shows that Ohio’s 18-64 population increased 3% to 7.18 million from 6.97 million this decade. Plus, the number of 65-and-over Ohioans increased by 4% to 1.57 million from 1.51 million, according to the Xenia Citizen Journal.

Cynics might call the move a public relations ploy from a bank that took $1.4 billion worth of TARP bailout money from the taxpayers, but the investment is expected to create 1,300 new apartments for 3,0000 “low-to-moderate-income people,” Huntington says.

That’s going to help a lot of people get back on their feet and give them a good roof over their heads — and a shot at a brighter financial future. Hopefully, more banks will follow Huntington’s lead.

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