BANKING/FINANCE : O.C. Families Earning $59,000 Yearly Can Get a Break on Home Loan

A household income of $59,000 might sound pretty good in most parts of the country, but not in relatively affluent Orange County.

For purposes of a national housing program, county households earning up to that amount are considered to be in the low- to moderate-income bracket--and eligible for special breaks on the purchase of a home.

Those breaks--relaxed credit standards and lower down payments--are part of a new program designed to implement the goals of the 1977 Community Reinvestment Act, which encourages financial institutions to provide mortgages to those who would otherwise not qualify for conventional loans. The act, largely ignored by banks and S&Ls;, was rejuvenated by a federal law enacted in August to bail out the thrift industry’s deposit insurance system.

The new program, organized by General Electric Mortgage Insurance Co. and the Federal National Mortgage Assn., gives breaks on loans to prospective home buyers whose household income is not greater than 120% of the county median income. In Orange County, that figure is $59,000.

Several county thrifts have signed up for the new program to help low- and moderate-income households qualify for home loans in an area where the median resale house price is more than $250,000 and where only about 15% of the residents can afford to buy that home.

Standard Pacific Savings in Newport Beach, for instance, is customizing the program by adding its own twist. It will borrow money at lower interest rates than what is available to consumers and pass the savings on to borrowers who meet certain criteria.

Among other county S&Ls; enlisted in the new program are Plaza Savings & Loan and United California Savings Bank, both in Santa Ana.