Reading the paper this morning – it was refreshing to see information to help local want-to-be homeowners find some assistance. Enjoy this article I found in SF Chronicle. If you have questions – email me anytime at info@TheCatonTeam.com
Resources for lower-income homebuyers
Programs available to give low-income people a chance in difficult market
By Carolyn Said at SF Chronicle
San Francisco — Wakeelah and Andre Davis “always wanted to own a home and had been saving up,” said Wakeelah, an AC Transit bus driver. Like many first-time home buyers, especially those of modest means, they were consistently outbid by investors who could pay all cash.
“I kind of gave up for awhile,” Wakeelah Davis said. Then she came across a Richmond two-bedroom. The online listing said it would only be sold to people who wanted to live in it. The listing asked, “Tired of being beat out by cash offers?
“That sparked my interest to come back and try,” she said. “I thought maybe I’ll have a chance.”
The ad had another unusual requirement: It asked prospective buyers to write a letter about themselves, their house-hunting quest and their ties to the community.
“I told them I was born and raised in Richmond and I love the area. I graduated from Kennedy High and that’s where my son wants to attend,” said Wakeelah, whose son Dre’onn, 13, is now in middle school.
Even though theirs wasn’t the highest offer, the Davis family was selected to buy the house.
The seller was a nonprofit with a mission to buy, renovate and resell foreclosed houses only to owner-occupants under the unwieldy name “Foreclosure Recovery and Asset Building Management Project.”
“We want to help low- to moderate-income families get into homeownership so they can increase their self-sufficiency,” said Nicole Taylor, CEO of the East Bay Community Foundation in Oakland, which provided seed money for the program as a project of Self-Help Community Development Corp. “The idea was that maybe we could help families turn around their lives by providing them with an opportunity to buy this key asset that can grow in value.”
The mission also includes boosting local communities.
“We seek families who have roots in the community so they can maintain their family ties and help neighborhoods by having more stable families,” said Paul Staley, vice president of Self-Help Community Development Corp.
In operation since 2010, the program has handled just 18 homes, mainly in Contra Costa County, although it’s branching into Oakland. Taylor sees it as a pilot program and hopes to find funds to expand.A variety of similar programs exist that buy, fix and resell foreclosures to homeowners. Some use funds from the federal Neighborhood Stabilization Program, which was set up to help communities hard-hit by foreclosures and blight but is winding down.
But all such programs “are just a drop in the bucket,” said Maria Benjamin, executive director of Community Housing Development Corp. of North Richmond, which provides financial education to prospective home buyers, including those in the Self-Help program. “They are few and far between; there just isn’t enough money.”
Besides the resold-foreclosures programs, there are a variety of resources for low- and moderate-income people seeking to buy homes (see box). Though not enough to meet demand, it behooves prospective home buyers to learn about them, experts said.
Some advocates say the government should be doing much more to encourage and support lower-income homeowners.
Sasha Werblin, economic equity director at Berkeley’s nonprofit Greenlining Institute, which tries to extend opportunities to people regardless of race or income, listed several policy areas where she hopes legislators and regulators will take action.
They include pushing banks to create “sustainable mortgage products that work for middle- and low-income borrowers,” she said, adding that it’s critically important that borrowers demonstrate income to pay back loans, to avoid a repeat of the subprime lending disaster. Another step would be a bank-backed pool of funds for down-payment assistance, she said. She’d also like to see lenders pay closer attention to borrowers’ payment history, giving credit for a history of on-time rent and utilities payments – something that current credit scoring systems don’t take into account.
“We’d like the administration to take a more comprehensive and proactive stance about homeownership for everyone,” she said.
Wish list for help
Sheri Powers, director of the homeownership center at Oakland’s Unity Council, works directly with prospective home buyers. Her wish list for government help includes a way to urge banks selling foreclosures to sell to owner-occupants rather than investors.
“If they are serious about stabilizing communities, giving preference to buyers who want to occupy homes would make a huge difference,” she said. “Right now, they just want to sell as fast as possible. If an investor has cash, they’ll just lap it up – even if it’s $20,000 or $30,000 lower” than financed offers that take longer to close.
Resources for home buyers
A variety of programs provide help for low- and moderate-income home buyers, ranging from advice to money. Each program has different criteria.
Counseling and education
Find an agency near you for home-buyer education workshops and information on financial-assistance programs.
Neighborworks agencies, www.nw.org/network/nwdata/homeownershipcenter.asp
— HUD counseling agencies, www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?&webListAction=search&searchstate=CA
Down payment and financial assistance
Most programs have income and/or geography requirements. Many large cities – including San Francisco, Oakland, San Jose, Alameda, Hayward and San Leandro – offer programs. Do a Web search of your target city and “down payment assistance.”
— California Home Financing Agency (CalHFA), www.calhfa.ca.gov/homebuyer/programs/chdap.htm, provides a deferred-payment junior loan of up to 3 percent of the purchase price.
— Wells Fargo East Bay CityLift, www.unitycouncil.org/citylift-main-page-2/L. Down-payment grants of $20,000 are available for about 150 home buyers in nine participating East Bay cities.
— California State Teachers’ Retirement System, www.calstrs.com/home-loan-program. The retirement system is working to restart its down payment assistance program for teachers.
— CHF Platinum www.chfloan.org. Down payment assistance for low- and moderate-income borrowers in California; works only with FHA loans
— WISH (Workforce Initiative Subsidy for Homeownership), www.fhlbsf.com/community/grant/wish.aspx. Federal Home Loan Bank runs through participating banks. Provides 3-to-1 match for down payment funds. Must be used in conjunction with a local down payment assistance program, for instance from a city, county or employer.
— IDEA (Individual Development and Empowerment Account) www.fhlbsf.com/community/grant/idea-profile.aspx. A matching loan for households that participate in a home buyer education and savings management plan.
— Mortgage Credit Certificate (MCC), www.calhfa.ca.gov/homeownership/programs/mcc.pdf. This federal program allows qualifying homeowners to deduct a larger portion of their interest payments from their tax bill. Lenders are willing to account for this in calculating borrowers’ income.
Low-down payment loans
FHA (Federal Housing Administration) and VA (Veterans Affairs) loans are two key sources for people with lower down payments. Counselors recommend a couple of other options for lower-income borrowers that do not require the extra cost of mortgage insurance.
Union Bank Economic Opportunity Mortgage, www.unionbank.com/EOM
— CitiBank HomeRun, www.citibank.com/citimortgage/employee/lowdown.htm
Homes for sale
Neighborhood Stabilization Program, hudnsphelp.info/index.cfm?do=viewGranteeAreaResults The federal NSP program, which gives money to local governments to buy, fix and resell foreclosures, is winding down. This site details local grant recipients, some of which may still have homes for sale.
— Freddie Mac lets home buyers subscribe to lists of its foreclosed homes for sale in their area, www.homebase.homesteps.com
— Fannie Mae has an online database of its foreclosures for sale, www.homepath.com
— Several Bay Area cities offer “below-market-rate” units for sale to lower-income homeowners. Search the city’s name and “below market rate.” San Francisco’s program is at http://sf-moh.org/index.aspx?page=299
I read this article at: http://www.sfchronicle.com/realestate/article/Resources-for-lower-income-home-buyers-4512719.php
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