EBR Mortgage Finance Authority closings brisk despite U.S. real estate slump

August 08, 2008

BATON ROUGE— Closings on home mortgages provided by the East Baton Rouge Mortgage Finance Authority were brisk in the first quarter of this year, contrary to the nationwide slump in real estate sales.

The Authority began 2008 with $20 million in mortgage money available for middle- to low-income homebuyers. At the end of March, the Authority had committed and/or closed on $7.2 million in mortgages, leaving a balance of less than $13 million for new borrowers. The first-quarter closings were about on par with pre-Katrina closings by the Authority, but somewhat lower than 2007 activity.

“The prime home-buying season traditionally begins in April and runs through June,” said Astrid Clements, chair of the Authority. “With that in mind, we remind qualified homebuyers that the Authority committed its entire annual allocation of bond money by early September last year. We don’t expect this year’s allocation to last much beyond the end of the summer.”

The Authority had $40 million available for mortgages last year. Last year’s mortgage activity was the most intense the Authority had experienced since the economic boom of the 1980s. Due to adverse conditions in the national bond market, the Authority sold only $20 million in bonds for 2008 mortgages—half the previous year’s amount.

The Authority’s mortgages had traditionally been reserved for first-time homebuyers in East Baton Rouge Parish. Following Hurricanes Katrina and Rita, the Authority was allowed to temporarily remove the first-time homebuyer restriction.

One of the most popular features of the Authority’s loan program is the down payment/closing cost assistance of 4 percent of the loan amount, which allows eligible program participants to purchase a home with no or reduced down payments and/or reduced closing costs. A borrower could qualify for up to $6,000 in assistance, which does not have to be repaid, on a typical mortgage of $150,000. The Authority’s interest rates on non-assisted mortgages are competitive with mortgage loans provided by commercial lenders.

Over the past 30 years, the EBR Mortgage Finance Authority has provided more than $914 million in mortgage loans to over 15,000 middle- to low-income households.

The Authority provides the funds, but the mortgages are made available through these local providers: Chase Home Mortgage, Countrywide, Hancock Bank, Homebuyer’s Resource Group, Iberia Bank, Regions Bank, SWBC Mortgage, Wells Fargo Mortgage and Whitney National Bank.

Homebuyers can learn about eligibility requirements for the Authority’s mortgages and contact information for local providers by visiting www.ebrmfa.org. Prospective homebuyers should contact one of the lending agencies directly.

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