Thursday, July 15, 2010

10 Percent Down Payment Assistance Is Here

This particular house recently sold, but there are many other attractive homes available for purchase in San Bernardino. Buyers making up to $78,000 for a family of four can purchase homes like these with up to 10 percent down payment assistance through a program offered by the San Bernardino Economic Development Association.  Photo by Chris Sloan

(San Bernardino, Calif.) Families making up to $78,000 for a family of four, and more for larger families, qualify for down payment assistance and a low-interest loan from the City of San Bernardino’s Economic Development Agency.
“The best way to get rid of foreclosed homes in San Bernardino is for families to buy them and live in them,” said Emil Marzullo, director of the San Bernardino Economic Development Agency. “ It seems simple, but with home prices down to an average of $70,000 there has never been a better time for families to buy a home.” 
The Homeowners’ Assistance Program provides first time homebuyers with up to 10 percent of the home purchase price. For a $100,000 house that amount would be $10,000; for a $200,000 house the amount is $20,000.
The down payment assistance is a forgivable loan, offered at 3 percent interest.  The loan, plus a portion of the equity, would be due and payable if the homeowner sold or transferred title to another buyer, refinanced to cash out equity, or converted the home to a rental.
Some qualifications are:
1.     Purchase a home within the city limits of San Bernardino.
2.     Make a cash investment of $1,000 towards the purchase price of the home.
3.     Earn less than $78,000 a year for a family of four (120 percent of the Area Median Income adjusted for family size).
Those who can meet the qualifications may attend Homebuyer Education courses offered monthly.
The courses are open to everyone. All or part of the courses are required for borrowers with FHA loans, and for participants in other cities and San Bernardino County’s down payment assistance programs.
“Even if you are not participating in a down payment assistance program, you will want to know the process if you are buying a home,” said Linda Jackson, manager of the Inland Empire NID-Housing Counseling Agency. “Buying a home is probably one of the most important decisions you will ever make.”
With the down payment assistance, the lower cost to potential homeowners can make the difference between affording a home and remaining a renter.
“Lower home prices make housing more affordable,” Marzullo said. “A family making $35,000 a year can afford to buy a $140,000 home.”
 According to Bank of America, with a $7,000 down payment and a 5.298 percent annual interest rate, on a 30-year fixed interest rate loan the payment would be $724.17 monthly.
The San Bernardino County Housing Authority says market rent for a three-bedroom apartment is about $1,425 a month.  That means buying a home with a fixed mortgage so that monthly payments never increase can save a homeowner thousands of dollars a year over rent payments. 
“We also know from experience that this housing price drop won’t last forever. Home values in San Bernardino will appreciate again at a more normal 1 to 3 percent a year.  That increase in home value builds family wealth that can be used in the future for children’s college education or retirement,” said Marzullo.

For more information on the Homeowners’ Assistance Program call the NID-Housing Counseling Agency at (909) 887-8700 or the Neighborhood Housing Service of the Inland Empire, Inc. at (909) 884-6891.