Monday, July 14, 2008

NORTHWEST AUSTIN HOMES: Want to buy a home? Need help with the down payment? The government may be able to help


For first-time buyers, often the first thought that comes to mind is, “I need a down payment.” This is often followed by the question, “Now, where do I get that down payment?”
Depending upon the loan type, a home mortgage typically requires 3 to 5 percent down. If you have the money, then you’re set. But what if you don’t? What if you’re renting? You can afford a mortgage within your means, but coming up with the down payment money needed to begin the transaction can be challenging. So, where can you turn?
One of the most overlooked sources of down payment funds is likely right under your nose—in the form of government bonds and local grant programs.
These programs either provide outright monetary grants for down payment or money to buyers in the form of a forgivable loan. In essence, the government will help you buy your home and you typically only have to pay back the money if and when you sell that same property.
In the past it was challenging to find these special programs, but now all you need is your agent, a computer, an Internet connection, and a search portal such as Google or Yahoo. Enter the search terms “down payment assistance (followed by your city, state or province)” and see what pops up! It might just be the answer to helping you buy your first home. Contact me if you would like additional information about how one of these programs may help you.

Wednesday, July 9, 2008

Affordable Housing in Mueller Airport Development

"The new Mueller Foundation gave the couple an interest-free, no-payment second mortgage to cover the $55,000 difference between the $165,000 they paid and the market value of the house. When the couple eventually sell the house, they will have to repay that loan plus share part of any profit with the foundation to help future buyers with below-average incomes. Those include first-time buyers, teachers and retirees who otherwise would not be able to afford a Mueller house."
Click here for complete story
This housing development is located at the old airport near 51st and Airport in North/East Austin. The thing that makes this development different than others is that they have formed a foundation that assists people that would like to purchase a home but they can not afford to live in a central location in the city. The foundation helps to keep homes affordable in the way of a no interest second mortgage. Here is an example of how it works, if the market value of the home is $200,000 and the home buyer gets a loan for $150,000, the foundation gives them a second no interest loan for the additional $50,000. If in a few years, the home is sold for $300,000 the buyers pay back the original $50,000 and a portion of the profit made. In this case, the home owner would retain $75,000 and the development would receive an additional $25,000. The home buyers will have an affordable monthly payment and when the home is later sold, the development makes their money back in addition to a portion of the profit. The foundation then uses a portion of that profit to continue to offer affordable housing for future home buyers.

25% of the homes, apartments, and condominiums within Mueller are available as affordable housing. Home buyers must make 80 percent or less of the area's median family income, which is currently $56,900 for a family of four. The affordable homes are sprinkled throughout the development and are similar to the market value homes but may have different options included.

This is a great way to help someone that would like to be a homeowner and qualifies for this program. In today's economy, I speak with a lot of prospective home buyers with a decent salary and good credit but can not really afford the payment of a house that is centrally located. On one hand the home buyer is giving up part of the potential profit they could make while owning the home but they would probably not be able to afford to live there otherwise. It will be interesting to see what happens in the future of this development. What do you think?