August 01, 2008
New bond issue will provide funding for additional mortgages in Baton Rouge
BATON ROUGE— The East Baton Rouge Mortgage Finance Authority has committed all of its available funds—$11.5 million—for mortgages to middle- and low-income homebuyers and plans to secure another $20 million to $25 million later this year under terms of federal legislation signed into law this week.
The Housing and Economic Recovery Act of 2008, passed by Congress and signed by President George Bush on Wednesday, allows the Authority to sell bonds at a lower rate of interest—savings that will be passed on to homebuyers. The new law allows certain tax advantages to those who purchase the bonds, making them more attractive to investors.
The Authority plans to present its proposed bond sale to the State Bond Commission for preliminary approval at its August meeting and for final approval at its September meeting. The Authority will then move forward with the bond sale based on favorable market conditions.
The Authority committed all the money it had available in the first six months of this year to just under 100 homebuyers. The average amount loaned was $115,000. Over the past 30 years, the Authority has provided more than $914 million in mortgage loans to over 15,000 middle- to low-income households.
“Demand for our loan products continues to be good, and we are moving as quickly as we can to close a new bond issue that will allow us to make another $20 million to $25 million available for middle- and low-income residents of East Baton Rouge Parish to purchase their own homes,” said Astrid Clements, Authority chairman.
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.
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.