Home buyers have another option to affordability
October 24, 2006
Bill Baker purchased his two-bedroom town house with only $500 in his pocket. His $8,200 down payment was covered by a state grant.
Without that, the 30-year-old Carson City man would be renting for another three to five years until he could afford a home.
Housing prices have begun to inch down in the capital city, but many low- or middle-income workers are still priced out of the market. State programs are bridging the wide gap between incomes and housing prices with down payment assistance grants and low-interest mortgage loans.
“On my $39,000 a year fireman’s pay, I couldn’t afford a house here. And I could expect to be laid off yearly, so that affects it too,” Baker said. “I heard about this program from Greater Nevada Credit Union, and they really helped me out.”
The down payment assistance program, funded by the Nevada Rural Housing Authority, helps buyers within a certain income purchase a home within Nevada’s 15 rural counties. Launched in the spring, the program uses tax-exempt financing to offer 5.59 percent interest rate fixed for 30 years coupled with a 4 percent down payment and closing-cost grant.
“We have nearly $1 million worth of loans in Carson City and overall $5.7 million in loans reserved,” said C.J. Manthe, chief financial officer of Nevada Rural Housing Authority.
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The authority has about $10 million available for this program, which it has never before offered, said Gary Longaker, executive director of the Nevada Rural Housing Authority.
“For a family building or buying a home in Carson City, they receive $8,000 in down-payment assistance for a $200,000 home, or for a $250,000 home a $10,000 down payment.”
The family must qualify for the 30-year fixed-rate mortgage and meet income and purchase price requirements.
Baker was laid off from his job as a U.S. Forest Service fireman about a year ago, which is one of the reasons he qualified for the program. Now working as a car salesmen in Carson City, his income exceeds the cutoff for someone who is single. With his higher-paying job he can afford to pay more on his $1,262 monthly mortgage payment.
“It’s amazing how fast your balance goes down when you pay $100 more on the principal,” Baker said.
He said the program secured his financial future.
He plans to stay in the $185,000 town house for about five years, continue to pay down the mortgage and then rent it out. Baker is refurbishing the home with new energy efficient windows. He’s splitting a large master bedroom into two smaller rooms so that he can bring in roommates. His goal is to make the home as energy efficient as possible in the next two years, not just for his own benefit, but for the added value.
How to apply
Could the Nevada Rural Housing Authority bond program work for you?
Who can apply: Those who have not owned a home in the past three years; qualify for a normal FHA, VA, conventional or Rural Housing Service loan. A family of three or more must make an income less than $84,000. A family of two or fewer, $72,000. The Carson City house must cost less than $359,000. The median cost of a house in Carson City was $310,000 in September.
How to apply: Contact local participating lenders Chase Home Finance, (888) 816-4824; CTX Mortgage, 886-5700; Greater Nevada Mortgage Services, 888-6999; US Bank, 688-6624. Or call the Nevada Rural Authority at 887-1795.
– Source: Nevada Rural Housing Authority; Northern Nevada Regional Multiple Listing Service
• Contact reporter Becky Bosshart at email@example.com or 881-1212.