First-time homeowners receive help from state

January 16, 2008 at 1:38 pm  | Mobile Reader | Pring this storyPrint 

Louisiana residents looking to purchase their first home will receive extra help from the state by way of a mortgage program that assists those without the money for a minimum down payment or closing costs.

The Mortgage Revenue Bond Assisted Program (MRB) is available statewide for first-time homebuyers with the closing costs or down payment assistance coming in the form of a grant equal to 4 percent of the mortgage amount. The program also has interest rates that are usually at or below market level, with the most current interest rate sitting at 6.50 percent.

Last November, the Louisiana Housing Finance Agency put $73.2 million into the program. 

Those meeting the income limits, who have an average to good credit score and a stable income, qualify for the program as long as the property they purchase is in Louisiana. The property must also be owner-occupied and be either a new or existing one unit dwelling, condo, townhouse or manufactured home. Mobile, recreational or vacation homes are not eligible under this program.

In addition to the MRB program, the state also offers other programs that can help homebuyers inside the parish. The Low Mortgage Unassisted Program is for homebuyers who have the minimum down payment and money for closing costs, but want a below-market interest rate, which is currently at 5.95 percent. While many people are eligible for that program, there is a Teacher's Assisted Program that offers certified teachers a subsidized rate of 6.25 percent, plus a grant equal to 4 percent of the mortgage amount.

The Herald-Guide recently spoke with AmCor Mortgage's Julie Otillio, whose firm is approved by the state to assist residents with these programs.

Why is the MRB program so useful to parish residents?

"It's a useful program because it helps people to overcome one of the biggest barriers to owning a home, which is coming up with the thousands of dollars needed for the closing costs. For example, if someone is purchasing a home for $175,000 and qualified for a 100 percent conventional loan, they will receive a grant of $7,000.  With the grant money, they will be able to get into the home with less than $1,000 total out of pocket instead of $8,000."

Are many people in the parish eligible for this program?

"With over 500 homes currently listed for sale between St. John and St. Charles parishes, many homes are priced below the maximum sales price of $237,031.  In fact, 155 of those are in St. Charles Parish. I do want to make the point that the borrowers must be qualified for the mortgage loan in order to be eligible to participate in the subsidy programs."

I know that a family of three can be eligible with a total income of up to $60,030, but what about a family of two or less?

"Family of two or less income limit for St. Charles and all New Orleans MSA parishes is $52,200 as of 2007C issue.
Some funds are still available from 2007B issue allowing higher "targeted" income limits in St. Charles and St. John as follows:
Family of two or less:  $62,640     Family of three or more:  $73,080."

How did the $73.2 million funded by the LHFA help the MRB program?

"There was a waiting list for funds last year, but fall-out allowed most requests to be funded.   There has not been a waiting list with the recent issue."

What about the Low Rate Mortgage Unassisted Program? How does that help homebuyers?

"It helps to offset the higher cost of insurance with a payment based on a lower than market interest rate."

How is someone eligible for that program?

"If they are qualified for the loan program chosen, purchasing a home to owner-occupy, and meeting the program sales price and income limits."

For further information on any of these programs, call (985) 785-5500 and ask for Julie Otillio.

View other articles written Jonathan Menard

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