Programs can help make home ownership a reality – American Press

Programs can help make home ownership a reality

Published 12:03 pm Tuesday, August 30, 2022

The American dream of homeownership is slipping out of reach for low- and moderate-income Americans. Louisiana Housing Corporation (LHC) and USDA Rural Development was in Vinton last week to talk to homebuyers, lenders, realtors and developers about programs available that could make safe, affordable, energy-efficient housing a reality for more people.

The (Mortgage Revenue Bond) MRB home program is one of many. It helps first-time homebuyers with a credit score of 640 or higher who are at 80 percent of the area’s median income with down payment and closing cost assistance from five to nine percent, depending on the loan amount.

For example, in certain areas of Calcasieu Parish the maximum permissible family income limit can be from $75,000 to $90,000 – depending on housing development initiatives – for a family of two or less.

“Currently our rate is five-and-a-half percent with four percent down payment assistance,” according to Rachel Haney, a spokesperson for LHC. “We constantly monitor the market to make sure our rates are competitive. Our average loan amount is $172,000.”

Haney offered a possible scenario for an applicant having a 640 minimum credit score who takes advantage of the LHC MRB program through a participating lender.

This is only an example. Individuals will need to contact participating lenders for actual amounts.

Taking advantage of the MRB Assisted program – there are different programs available – on a $170,000 house, the FHA loan would be $164,050. Monthly income and expense for this scenario is $2,870. Total down payment and closing costs are $11,033.76. In this example, LHC contributed $6,676.90 in down payment assistance. LHC contributes $6,676.80 at 4 percent down payment assistance. As long as the borrower remains in the home 60 months/5 years, this portion does not have to be repaid.

“Sabine State Bank is pleased to be one of the local banks that offer this program,” said Kellie Anthony, mortgage loan originator.

First Federal Bank also participates.

The LHC also provides soft seconds to USDA Rural Development for closing costs, meeting the gap for higher loans.

A soft second is a type of second, subordinate mortgage loan that is used to cover down payment and closing costs. The soft second has a deferred payment schedule in which borrowers do not have to make any payments until/unless they sell their home or refinance their mortgage.

The USDA Rural Development Section 502 Direct Loan Program provides a path to home ownership for low- and very-low-income applicants for decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income. Interest rates can be very low with longer than the norm payback periods. No down payment is required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.

LHC also partners with non-profit groups, developers, government agencies and other housing industry experts to create sustainable affordable housing for Louisiana residents.

Art Schuldt is with Housing Solutions Alliance, a consulting company for public and assisted housing agencies and programs. He was at the Vinton meeting to find out about available community development funding for a Merryville project.

“The quality of housing in a community speaks to the quality of life of the community,” Schuldt said. “That’s why I support affordable housing.”

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Go to www.lhc.la.gov to find out more.

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