Real Estate Market

State, local housing programs to the rescue

by Broderick Perkins

(01/24/2011) With tight fisted lenders more often seeking hefty down payments from those seeking to buy a home, more state agencies are pitching in to help qualified borrowers who are cash poor but income rich.

The National Association of Independent Housing Professionals says the number of down payment assistance programs has grown by as much as 5 percent in the last six months.

The programs offer grants and low- and no-interest loans, typically to first-time home buyers with low- to middle-incomes.

Some programs also target teachers, police officers, medical workers and other types of workers crucial to a community's well-being.

The down payment grants are a boon, particularly in high cost areas where median priced homes hit the half million dollar mark and 20 percent down means coming up with $100,000 in hard cash.

Along with down payment assistance, the programs often use preferred lenders who make the mortgage for as much as 1 percent below market rates.

Funded by state and federal agencies, the programs must produce a solid record of home ownerships that don't falter even in hard times.

That means consumers who qualify for the programs must first get counseled on home ownership -- everything from the mortgage application, credit and budgeting to being zealous about preventive maintenance and upkeep.

The counseling may just be the best part of the deal, according to findings recently released in a "National Foreclosure Mitigation Counseling (NFMC) Program Evaluation" generated by the Urban Institute based on data from 960,000 NeighborWorks America (NW) clients counseled in 2008 and 2009 and reported to NW America in January 2010.

NW-assisted home owners facing foreclosure were 1.7 times more likely to save their homes than others who didn't get the counseling.

Even when a home owner was in the foreclosure pipeline, 55 percent of them with NW-counseling escaped foreclosure within 12 months compared to only 38 percent of home owners in foreclosure working without NW counseling.

See what your state or local government has to offer through the U.S. Department of Housing and Urban Development's (HUD)Local Home Buying Programs web page and follow local and state housing program news.

Also ask your mortgage lender or broker, real estate agents, religious, social and community organizations and non-profit agencies for referrals to local and state programs.

 

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