$10-Million Offered in Home Loan Assistance
In an effort to ease the path to home ownership for low- and moderate-income families, the Federal National Mortgage Assn. last week announced a $10-million mortgage loan program for Southeast and East Los Angeles County residents.
Officials said the program, which will be funded by Fannie Mae and administered through First Interstate Bank, will lower two of the biggest barriers facing prospective home buyers: down payment and credit history.
Under the program, qualified families will be able to buy a home with as little as 3% down and will have as much as half of the closing costs waived. Borrowers with household incomes of less than $51,600 can qualify for the program, which will offer a variety of fixed-rate and variable-interest loans.
In addition, bank officials will look at alternative evidence to evaluate credit history, such as timely utility and rent payments, said Roderick Gaines, vice president and manager of sales and marketing support at First Interstate.
The program was announced Wednesday in Huntington Park at a seminar for real estate agents sponsored by Rep. Lucille Roybal-Allard (D-Bell Gardens), who worked with the Federal National Mortgage Assn. to provide the loan money for her 33rd Congressional District.
“Buying a home in East and Southeast Los Angeles just got easier,” Roybal-Allard said.
In the past year, financial institutions nationwide have come under increased criticism for rejecting home mortgage applications from Latinos and African-Americans at a higher rate than those from Anglos and Asians. A recent Times study of mortgage lending in Los Angeles County showed wide disparities among racial and ethnic groups for 1990, the latest year for which figures are available.
First Interstate, which counted mortgage, refinance and improvement loans together, had rejection rates of 16% for Anglos, 26% for Asians, 29% for African-Americans and 42% for Latinos.
Gaines estimated the $10 million targeted for East and Southeast Los Angeles will be enough for about 100 loans and said Fannie Mae would likely provide additional funds thereafter. “As quickly as we can go through this, we want to do it again,” Gaines said. “Our objective is to get as many people into houses as fast as we can.”
The move was welcomed by community groups.
“It’s certainly a long time coming. This has to be one of the biggest attempts by a bank to put money into this area,” said Ralph Carmona of the Boyle Heights Chamber of Commerce.
The loans are available to families in Bell, Bell Gardens, Cudahy, Commerce, Huntington Park, Maywood, South Gate, Vernon and Walnut Park, and the Los Angeles communities of Boyle Heights, East Los Angeles, Florence-Firestone, Chinatown, Little Tokyo and Pico-Union.
Bilingual loan officers will be available and First Interstate will work with community groups and local real estate organizations to publicize the program, said Mary Salinas Duron, a bank vice president and director of community reinvestment.
