Low-Cost Loans: Affordable housing in Southern California got a bit of a boost recently when two major mortgage buyers agreed to purchase $5 million in future home loans for low- and middle-income borrowers who go to Western Financial Savings Bank in Irvine.
The agreement with the Federal National Mortgage Assn., commonly known as Fannie Mae, and General Electric Mortgage Insurance Co. allows the savings and loan to participate in Fannie Mae’s Community Homebuyer Program, which also will help the S&L; meet its obligations under the Community Reinvestment Act.
Under the program, Western Financial can loan up to 95% of the value of a home and then sell the loan to Fannie Mae or GE.
Affordable housing standards give new meaning to low- and middle-income buyers. To qualify for such a loan, borrowers cannot earn more than 120% of an area’s median income, which would amount to $62,000 in Orange County, $43,000 in Riverside-San Bernardino and $49,500 in San Diego County. At that level, loan amounts could go as high $180,500 in Orange County.
Western Financial will continue to service the loans--billing borrowers and collecting payments.