20 March 2009

Pathway to Homeownership Soft-Second Mortgage Loan Program

Own a Home. This is the Path.

Receive up to $65,000 soft second home mortgage at 0% interest.

100% forgivable in 10 years with continuous owner occupancy; payable only upon sale or refinance.

Up to $10,000 closing cost assistance grant also available.

Eligible Properties:

*One or two unit residences within one of the Orleans Parish Housing Opportunity Zones (see map on http://www.financeauthority.org/), or when the residence is part of the New Orleans Redevelopment Authority (NORA) Re-development Portfolio or when the seller can demonstrate at least $5200 of damages realized from Hurricane Katrina and/or Rita within Orleans Parish

*Maximum Property values: One unit, either New or Existing: $289,704; and Two unit, Existing Only: $370,884

*All properties must meet City Building Code and Zoning Code requirments as well as the physical standards and inspection procedures of FHA/VA, Fannie Mae or Freddie Mac mortgage loan product chosen by the borrower

*Newly constructed, reconstructed or renovated homes are eligible. Modular or panelized construction is also eligible

Eligible Borrowers:

*Have not owned a home within the last 3 years or no longer own your home because of a divorce or death of a spouse

*Have not received payments from Road Home under the 'sell' or 'relocate' option *Family incomes at or below the following:

1 person $50,280

2 persons $57,360

3 persons $64,560

4 persons $71,760

5 persons $77,520

6 persons $83,280

7 persons $89,040

8 persons $94,680

*12 Hour homebuyer education required

*Minimum personal investment of 1% of purchase price or $1500, whichever is greater

Steps to Buying Your New Home:

1. Visit the Finance Authority of New Orleans website to learn about the program at http://www.financeauthority.org/.

2. Gather your financial information: tax returns and W-2s for the last three consecutive years, pay-stubs within the last three months, financial documents related to all your sources of income, listing of all real estate investments, listing of all investments in stocks and/or bonds, listing of the balances due to any creditor or for any credit account owed.

3. Determine the first mortgage loan amount you can afford. You can do this by registering with a homebuyer training organization OR visiting a participating lender (see a list of homebuyer training organizations and participating lenders at http://www.financeauthority.org/). OR, you can complete a pre-application at our website http://www.financeauthority.org/ and a home counselor will call you.

4. Register with a participating homebuyer training organization certified by the Louisiana home-buyer Training Collaborative, Inc. and take the required 12-hour homebuyer education and training course. See our website for a list.

5. Complete a loan application with a participating lender. Please bring all documents gathered in step two to the participating lender.

6. Negotiate an Agreement to Purchase a home with the seller of a home in a Housing Opportunity Zone OR with New Orleans Redevelopment Authority (NORA) OR with a seller within Orleans Parish who can demonstrate $5200 of Hurricane Katrina/Rita damage. You should seek the assistance of a realtor in negotiating the agreement to purchase.

7. Close on your new home loan.


To learn more about the Pathway to Homeownership Soft-Second Mortgage Loan Program, call (504) 524-5533 local or (877) 524-5533 toll-free

This home mortgage loan program is made possible by Louisiana Recovery Authority, State Office of Community Development, City of New Orleans & The Finance Authority of New Orleans. The Finance Authority does not discriminate on the basis of age, sex, religion, national origin, physical handicap, political or union affliation. No person, solely on the basis of any of the above factors, shall be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under the loan program operated by The Finance Authority of New Orleans. Effective Date: February 18, 2009

02 March 2009

What you should know about the First-Time Homebuyer Tax Credit

The American Recovery and Reinvestment Act of 2009 features an $8,000 tax credit for first-time buyers who purchase a home on or after January 1, 2009 and before December 1, 2009.

Details of the tax credit include:

*The temporary credit is only available for home purchases made from January 1, 2009 to before December 1, 2009 and is equal to 10 percent of the cost of the home, up to a maximum credit of $8,000. (For example, a home purchased for $80,000 or more would qualify for the full $8,000 credit while a $70,000 home would only qualify for 10 percent, or $7,000)

*Only first-time homebuyers can take advantage of the tax credit. A first-time buyer is defined under the tax credit as an individual who has not owned a home in the last three years. For married joint filers, both must meet the first-time homebuyer test to take the credit on a joint return.

*There are income guidelines on the credit. Individuals with an adjusted gross income up to $75,000 (or $150,000 if filing jointly) are eligible for the full tax credit. The credit is phased down for those earning more and is not available for those with an income above $95,000 (or $170,000 if filing jointly).

*Buyers claim the credit on their federal tax return to reduce their tax liability. If the credit is more than their total tax liability for that year, the buyer will get a refund check for the balance.

*Eligible properties include anything that will be used as a principal single-family residence -- including condos and townhouses.

*The new tax credit does not have to be repaid if the buyer stays in the home at least three years. But if the home is sold before that, the entire amount of the credit is recaptured on the sale. People who purchased homes under the 2008 $7,500 tax credit program will still be required to repay that credit to the government over a 15-year period.

New Orleans Real Estate Market Not as Bad as Some Others, Experts say.

Kate Moran, The Times-Picayune February 27, 2009

While the volume of home sales plunged across greater New Orleans in the past year, real estate here has not suffered the freefalling prices and rampant foreclosures that have chilled the economy in California, Florida, Arizona and other hothouse markets.

Two local real estate experts who spoke Thursday evening at a forum sponsored by the Home Builders Association of Greater New Orleans gave a relatively strong prognosis for housing in this region, where the tide of insurance and recovery grants have helped insulate the economy from national pressures.

"It did not start here, and it is not very deep here, " Arthur Sterbcow, president of Latter & Blum, said of the housing crisis.

Home sales plunged last year across the metro area to 1,200, down from 1,900 the year before Hurricane Katrina and 2,200 the year after the storm, according to Sterbcow. At the same time, the inventory of homes listed for sale has started to fall in recent months, indicating it could become easier to sell a home.

Sterbcow noted that the gap between the supply of homes on the market and the number of buyers looking to snatch them up has started narrowing, and in many parishes the divide is smaller today than it was during the oil bust of the late 1980's. Mandeville is one of the few areas where the gap is greater now than it was then.

Yet neither Sterbcow nor real estate consultant Wade Ragas predicted a boom year for the home builders who formed their audience Thursday night. As the supply of new homes, especially on the north shore, continues to outstrip demand, builders have curtailed the pace of new construction. A number of them, unable to find buyers, have lost newly build houses to foreclosure.

Ragas, a retired University of New Orleans professor, said demand has slackened because many of the high-paying jobs tied to the oil and gas industry left the region after Katrina. The problem is not that builders saturated the north shore with too many homes, he said, but that potential buyers moved to other cities after the storm.

Ragas noted that the region has 68,000 fewer jobs today than it did in July 2005.

"The only way to fix an over-supply is to stop building, " he said. "You are doing what's needed to get back in balance, it just hurts like hell."

Ragas told the home builders that the recession infecting the American economy is the worst since the Great Depression. While he expected to see glimmers of recovery after President Obama's stimulus plan had a chance to take effect, he predicted the economy would make a second drop some time in 2010.

"This is the worst since the 1930's. There is not much question of that," Ragas said. "But it does not have the ferocity of the 1930's."

In New Orleans, he said, the nation's economic troubles would have the most dire consequences for the tourism, hotel and restaurant industries. The region has fewer residents but more restaurants than it did before the storm, a mismatch that would likely force some eateries out of business in the coming years.

Ragas also predicted some troubles in the apartment sector in New Orleans, which he said has become overbuilt since the storm. While the cost of construction remains somewhat high, consumers cannot afford rents at a level that will produce a large return for developers, he said.

At the same time, Ragas saw positive signs in the fact that insurance rates for single-family homes have begun to come back down to earth in greater New Orleans. Ragas praised Louisiana's insurance commissioner, Jim Donelon, for not making the same threats that recently drove insurance companies out of Florida. Sterbcow concurred.

"We have made great strides on insurance," Sterbcow said. "It's high but palatable."

It is another affirmative signal for greater New Orleans that the foreclosure crisis has amounted to a "non-event" here, he said. Less than half a percent of all households in Louisiana had a home caught up in some stage of foreclosure at the end of 2008, compared to 7 percent of all households in Nevada and 4 percent of all households in California, Sterbcow said, citing figures from the research firm, RealtyTrac.

Awful as Katrina was, Sterbcow was thankful that the storm hit three years ago rather than today.

"Can you imagine if Katrina had hit us this August, in this economy?" he said. "It hit us at a time when it was survivable for us."