FULLERTON : City Develops Plans to Aid Home Buyers

Hoping to aid first-time home buyers, the city is developing two programs that would lower mortgage payments and help cash-strapped families come up with down payments.

The city will seek to join a state mortgage credit program for low-income home buyers and will also develop its own plan to help them with down payments, the City Council decided last week.

The program would be the city’s first to directly assist home buyers, according to Gary A. Chalupsky, director of Fullerton’s redevelopment agency.

The effort is in response to state rules that require spending 20% of city redevelopment funds on affordable housing.

The cities of Anaheim, Buena Park, Garden Grove and Santa Ana already participate in the state program, which allows first-time home buyers to deduct money from their federal income-tax payments.

In that program, homeowners can deduct as much as 20% of annual interest payments from their taxes.

With the credit, the owner of a $150,000 home would pay the same monthly mortgage payment as the owner of a $123,000 home who did not have assistance.

The agency is applying for $3.5 million in credits through the state program.

The agency also proposed a city-run mortgage assistance program that would help reduce down payments required to purchase a home to as little as 5% of the property’s value.

The agency proposed spending $560,000 to help qualifying buyers meet their mortgage down payments.

The programs will probably begin in March, 1993. Officials said they will publicize the effort once the city qualifies.

City officials say 25 homeowners could benefit from the first year’s state program.