Mortgage Program to Cover Wide Range of Borrowers
The Federal National Mortgage Assn.’s ambitious $6-billion plan to help tens of thousands of families buy a home in Orange County covers a wide range of potential borrowers, from first-time buyers to the elderly.
Fannie Mae, as the nation’s largest provider of mortgage funds is known, disclosed Wednesday the details of its plan to help up to 60,000 low- and moderate-income families buy homes over the next five years.
Increasingly, the mortgage industry is realizing that typical mortgages requiring 20% down payments cannot be a one-size-fits-all solution to improving the rate of home ownership in high-cost areas such as Orange County, company officials said.
By teaming up with nonprofit organizations, local governments and private businesses to help low-income families, Washington-based Fannie Mae is creating mortgages that give lenders more flexibility in approving loans up to $240,000.
“Together, we created a comprehensive strategy to address housing needs unique to the region, so that low-, moderate- and middle-class families can continue to afford to live in Orange County,” said Ted Chandler, vice president of housing and community development for Fannie Mae.
Existing Fannie Mae programs will be strengthened and more money will be available to lenders, which the association hopes will lead to higher home-ownership rates over the next five years, Chandler said. The effort, dubbed House Orange County, is one of the largest ever launched to address the county’s growing housing affordability problem.
Fannie Mae announced several features of the county plan Wednesday.
First-time buyers: Fannie Mae will buy more than $45.2 million in mortgage revenue bonds to provide below-market mortgage loans to more than 300 first-time home buyers. Those with annual household incomes of up to $79,000, or 15% above Orange County’s median, will be eligible for the program.
Senior co-op owners: Those 62 or older living in Laguna Woods who are close to paying off their homes are eligible for reverse mortgages. Fannie Mae has raised its commitment to $6 million from $2 million. The reverse mortgage is available through GMAC Mortgage Corp., Seattle Mortgage, Quaker City Federal Savings and Loan and Financial Freedom Senior Funding Corp.
Employer-assisted housing: Employers who participate in the program will provide workers with money for a down payment or closing costs. This is designed to help employees find housing close to work. There is no income limit. Public-service employers, such as school districts and hospitals, have used similar programs to help lower-level employees, including a program for police officers and firefighters in Los Angeles, Chandler said.
Disabilities: Home buyers with disabilities or who live with family members with disabilities may qualify for lower down payments or be able to count Social Security as income. The annual household income cap on this option is $68,500.
Low down payments: Some loans will come with a down payment of as little as 3% of the purchase price and allow borrowers to obtain the money from parents or other nontraditional sources.
Home rehabilitation: New buyers or owners of older homes can get a loan to finance repairs, as long as the home’s value and renovations combined total $240,000 or less.
For more information, call Fannie Mae’s Consumer Resource Center at (800) 732-6643 between 6 a.m. and 2 p.m. Monday through Friday.
