Home Loan Program Set Up to Aid Buyers in Depressed Areas

As many as 700 families will qualify for loans to purchase and renovate homes in low-and middle-income neighborhoods in Los Angeles under a program announced Monday by city and federal officials.

The $100-million Home Works! mortgage program by the Federal Home Loan Mortgage Corp., or Freddie Mac, is designed to help first-time home buyers obtain and improve homes in depressed neighborhoods.

The program will allow home buyers to finance up to 95% of the purchase of a home and to borrow additional funds from the city’s Housing Department to make repairs. The rehabilitation loans will be interest-free and will not be due until the owner sells the home.

City officials said the favorable terms will encourage stable families to move into marginal neighborhoods.

“Owning your own home is part of the American dream and provides stability to Los Angeles’ diverse neighborhoods,” Mayor Richard Riordan said as he stood in front of a home in South-Central Los Angeles.

Countrywide Funding Corp., First Interstate Bank and Family Savings Bank--a local black-owned institution--will originate and underwrite the loans.