(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 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.
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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