Union Unveils $100-Million Plan to Help Workers Buy Homes
The AFL-CIO announced plans Thursday to create a $100-million homeownership program for union families and municipal workers in Los Angeles--an effort to help workers buy homes in a market with record high prices.
The program, which is scheduled to begin locally in September, will provide first mortgages, refinancing and other assistance to as many as 1,000 workers in the area.
“The need is so great,” said Carol Miriam Nixon, director of public finance for the AFL-CIO’s Housing Investment Trust. “Our unions are very strong in the city of L.A. It’s important that we show our union members we’re willing to invest in the community.”
In the fall, the union will announce plans to invest in multifamily housing construction and rehabilitation, Nixon said.
Mayor James K. Hahn praised the union’s pledge as an example of the funding that Los Angeles can now attract because of a $100-million affordable housing trust fund the city created earlier this year.
“That kind of commitment demonstrates we’re putting our money where our mouth is,” Hahn said, speaking Thursday at a housing conference at UCLA. “Now that we’re investing [in housing], we’re going to see more investment.”
Several panelists at the conference noted the importance of housing to labor and business. Businesses often shy away from cities where their workers cannot afford to live. The absence of affordable housing for working families means many employees end up commuting long distances, increasing traffic congestion and other problems.
The AFL-CIO’s HIT HOME program operates in 18 cities across the nation, including New York, Philadelphia, San Antonio and Milwaukee.
The program, which began in late 2000, is a collaboration between Countrywide Home Loans, Fannie Mae and the AFL-CIO’s Housing Investment Trust.
Workers who apply for loans or refinancing through the program do not pay the costs of home appraisals or credit reports.
The program also offers, free of charge, specialized mortgages that save workers money at the end of the loan. Workers can link home payments to their paychecks, speeding up the repayment of their mortgages.
With the savings, workers are able to “get into a home for the least amount of money,” said Irma Munoz, West Coast manager of the HIT HOME program.
The program also offers home-buyer education and credit counselors to those who are not yet prepared to purchase a home.
The Los Angeles area is home to about 800,000 AFL-CIO-affiliated union members, the second-largest labor community in the nation, Munoz said. Fannie Mae, a congressionally chartered private company, secures the loans made by Countrywide. The AFL-CIO then uses its pension funds to purchase those loans.
“We stand behind the homeowners so that the AFL-CIO can invest the pension fund in a safe and sound manner and the homeowners can get the best possible rate and terms,” said Ted Chandler, Fannie Mae’s vice president of housing and community development for the western U.S.
