EBR Mortgage Finance Authority launches $20 million program for homebuyers

January 16, 2008

Program features reduced interest rates, down payment and closing fee assistance

BATON ROUGE— The East Baton Rouge Mortgage Finance Authority announced today it has $20 million available to provide mortgages for eligible low- and middle-income residents who purchase homes in the parish. The 2008 program features competitive interest rates as well as a buyer assistance package equal to 4 percent of the loan amount.

“We expect our 2008 program will be as popular as last year’s program, which was sold out in a record six months,” said Astrid Clements, the EBRMFA’s chairman. “We encourage all interested homebuyers to contact one of our lending partners as soon as possible. Our program is based on a first-come, first-served basis.”

Last year’s EBRMFA program was fully committed in six months due to its favorable terms, a robust residential real estate market, the parish’s growing population and a temporarily changed federal lending rule. The rule change, which remains in effect, extends the program to persons who previously owned a home. Earlier programs were restricted to first-time homebuyers.

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.

“Our 4 percent assistance is the key that makes it possible for many low- to middle-income families to become homeowners,” said Clements. “It’s often very difficult for people with modest incomes to come up with the fees and down payments required for home loans. About 95 percent of our borrowers take advantage of the assistance package.”

Eligibility requirements and maximum home prices for EBRMFA mortgages are on a two-tiered basis. One tier is for homes purchased in “targeted” areas and the other is for homes in “non-targeted” areas. Targeted areas are certain census tracts in which at least 70 percent of residents have incomes at or below 80 percent of the area’s median income.

To be eligible for the EBRMFA loan program in a non-targeted area, borrowers must have an annual income of $56,200 or less for a household of one or two people, and $64,630 or less for a household of three or more. The maximum purchase price for a home in a non-targeted area is $237,031. The maximum income in targeted areas is $67,400 for households of two or less, and $78,680 for households of three or more. The maximum purchase price for a home in a targeted area is $289,704.

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.

Prospective homebuyers should contact one of the lending agencies directly.

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