Mortgage-assistance program to target central Phoenix
Monday, October 15, 2007
Strapped buyers get a boost
Mortgage-assistance program to target central Phoenix
Annalyn Censky
The Arizona Republic
Oct. 14, 2007 12:00 AM
City and county officials are attempting to reinvigorate a lackluster residential real-estate market in central Phoenix with $8 million to help with down payments, closing costs and mortgage interest rates for low-income homebuyers.
Home in 5, a joint mortgage-assistance program, will focus on enticing more home buyers to purchase in "priority lending areas" largely between Camelback Road, 83rd Avenue, Chandler Boulevard and the eastern city limits. The priority areas also include a tract of county land between Phoenix's southern boundary and South Mountain.
Previously, the county's home-buyers' assistance programs drew its participants primarily from the East Valley and outer areas of Maricopa County, said Marissa Treviño, executive director of the Phoenix Industrial Development Authority. Low- to mid-income home buyers in the program who purchase new or existing homes in Phoenix's priority lending areas will receive a 30-year fixed mortgage rate of 6.29 percent, in addition to a 6 percent grant for down payments and closing costs.
Home in 5, a joint mortgage-assistance program, will focus on enticing more home buyers to purchase in "priority lending areas" largely between Camelback Road, 83rd Avenue, Chandler Boulevard and the eastern city limits. The priority areas also include a tract of county land between Phoenix's southern boundary and South Mountain.
Previously, the county's home-buyers' assistance programs drew its participants primarily from the East Valley and outer areas of Maricopa County, said Marissa Treviño, executive director of the Phoenix Industrial Development Authority. Low- to mid-income home buyers in the program who purchase new or existing homes in Phoenix's priority lending areas will receive a 30-year fixed mortgage rate of 6.29 percent, in addition to a 6 percent grant for down payments and closing costs.
In addition to the priority lending areas in Home in 5, the program has designated "targeted areas" that are identified by U.S. Census figures as being traditionally underserved by mortgage loans. Mortgage and down-payment help can be even more generous in these areas, which generally fall in Phoenix between 35th Avenue, Interstate 10, Southern Avenue and the eastern city limits, as well is on the tract of county land.
Margie O'Campo de Castillo, who owns her own real-estate firm in Phoenix and is a member of the Phoenix Industrial Development Authority's board of directors, said the program enables more low-income families to buy houses, thus decreasing the amount of excess inventory of real estate in the central city.
"Phoenix has too many brand-new subdivisions saturated with vacant homes," she said. "This program is vital and crucial right now."
Overall, $40 million in mortgage incentives are available for qualified recipients anywhere in Maricopa County, where the average price of a home has risen to $273,000 in recent years - a whopping 48 percent higher than the national average.
The money could go to long-time workers or recent graduates who may not have cash for a down payment or who would struggle with a higher mortgage interest rate at their current salary.
Outside the priority-lending areas, Home in 5 clients must either be first-time home buyers or must not have owned a home within the past three years. These candidates are eligible for a 5 percent grant and a 6.55 percent, 30-year fixed mortgage rate to buy a home in Maricopa County.
More than 1,600 home buyers have purchased houses through Home in 5 since June 2006.
Home in 5 participant Alaina Rinne said the program offers a positive alternative, given the problems many low-income buyers have encountered with subprime loan providers.
Rinne bought her $148,000 home near Seventh Street and Roeser Road in April. She hadn't owned a home for more than three years and qualified under the Home in 5 program for a mortgage with a 6.15 percent fixed rate.
Rinne said she wouldn't have considered moving to that area 10 years ago and was looking for a home on the outskirts of Phoenix instead. Once she heard more about the program, however, she changed her mind.
"I'm happy going home there," she said. "I think this is a piece of an overall plan to build downtown Phoenix into a more flourishing environment."
Rinne was recently divorced and bought the home alone - a feat she said she would have never thought possible before learning about Home in 5.
Ingrid Bohannon also bought her home as a single woman. A renter for most her adult life, she said she was surprised and overjoyed when her real-estate agent told her she would be able to finance a home alone.
"I thought it was too good to be true," she said. "At closing, I cried when I found out the amount of money I would have had to come up with."
Bohannon's $200,000 new home in Buckeye is outside the targeted areas, but nevertheless, she received a 5.9 percent fixed mortgage rate through Home in 5.
She recommends the program to recent college graduates, in particular, because she said it not only provides a place to live, but also financial stability despitelow income.
The program also has its benefits for lenders.
Home-loan consultant Gilberto Hernandez Jr. said his branch of Countrywide Home Loans Inc. gained between 40 and 50 clients in the past year because of Home in 5.
"For lenders, this program can increase their volume and give them more opportunities to help first-time home buyers," Hernandez said. "It also gives you more credibility."
Home in 5 funds are doled out to lenders on a first-come, first-served basis.
Phoenix Vice Mayor Dave Siebert hailed the program's 5 to 6 percent grants as a way to provide down payments, which are often the largest barrier to purchasing a home.
"Home in 5 has improved the quality of life for these residents and helped them obtain the American dream," Siebert said.
Margie O'Campo de Castillo, who owns her own real-estate firm in Phoenix and is a member of the Phoenix Industrial Development Authority's board of directors, said the program enables more low-income families to buy houses, thus decreasing the amount of excess inventory of real estate in the central city.
"Phoenix has too many brand-new subdivisions saturated with vacant homes," she said. "This program is vital and crucial right now."
Overall, $40 million in mortgage incentives are available for qualified recipients anywhere in Maricopa County, where the average price of a home has risen to $273,000 in recent years - a whopping 48 percent higher than the national average.
The money could go to long-time workers or recent graduates who may not have cash for a down payment or who would struggle with a higher mortgage interest rate at their current salary.
Outside the priority-lending areas, Home in 5 clients must either be first-time home buyers or must not have owned a home within the past three years. These candidates are eligible for a 5 percent grant and a 6.55 percent, 30-year fixed mortgage rate to buy a home in Maricopa County.
More than 1,600 home buyers have purchased houses through Home in 5 since June 2006.
Home in 5 participant Alaina Rinne said the program offers a positive alternative, given the problems many low-income buyers have encountered with subprime loan providers.
Rinne bought her $148,000 home near Seventh Street and Roeser Road in April. She hadn't owned a home for more than three years and qualified under the Home in 5 program for a mortgage with a 6.15 percent fixed rate.
Rinne said she wouldn't have considered moving to that area 10 years ago and was looking for a home on the outskirts of Phoenix instead. Once she heard more about the program, however, she changed her mind.
"I'm happy going home there," she said. "I think this is a piece of an overall plan to build downtown Phoenix into a more flourishing environment."
Rinne was recently divorced and bought the home alone - a feat she said she would have never thought possible before learning about Home in 5.
Ingrid Bohannon also bought her home as a single woman. A renter for most her adult life, she said she was surprised and overjoyed when her real-estate agent told her she would be able to finance a home alone.
"I thought it was too good to be true," she said. "At closing, I cried when I found out the amount of money I would have had to come up with."
Bohannon's $200,000 new home in Buckeye is outside the targeted areas, but nevertheless, she received a 5.9 percent fixed mortgage rate through Home in 5.
She recommends the program to recent college graduates, in particular, because she said it not only provides a place to live, but also financial stability despitelow income.
The program also has its benefits for lenders.
Home-loan consultant Gilberto Hernandez Jr. said his branch of Countrywide Home Loans Inc. gained between 40 and 50 clients in the past year because of Home in 5.
"For lenders, this program can increase their volume and give them more opportunities to help first-time home buyers," Hernandez said. "It also gives you more credibility."
Home in 5 funds are doled out to lenders on a first-come, first-served basis.
Phoenix Vice Mayor Dave Siebert hailed the program's 5 to 6 percent grants as a way to provide down payments, which are often the largest barrier to purchasing a home.
"Home in 5 has improved the quality of life for these residents and helped them obtain the American dream," Siebert said.
