October 16, 2009
BATON ROUGE— The East Baton Rouge Mortgage Finance Authority announced today it has money available for an estimated 160 mortgages for middle- to low-income homebuyers. The Authority’s recent bond issue to finance the program is believed to be one of only two in the nation completed this year by a local mortgage finance authority.
The Authority sells bonds and uses the proceeds to provide funding for mortgages at favorable terms to middle- to low-income borrowers. The Authority’s recently completed $20 million bond sale will fund about 160 home mortgages. Adverse national bond market conditions and other factors prevented the Authority from issuing new bonds after funds from its last bond sale were depleted in December 2008.
“We see indications that the market is strong for the mortgages we provide through our lending partners,” said Astrid Clements, chair of the Authority’s Board of Trustees. “We anticipate the funds we have available will be committed to borrowers quickly, so we encourage interested persons to begin working soon with one of our lending partners.”
The Authority funds 30-year mortgages at competitive interest rates for homes in East Baton Rouge Parish. Exact interest rates can vary between the various programs offered. A 5.375 percent interest rate with a 1 percent origination fee has been established for FHA, VA and RHS loans. The Authority is working with Fannie Mae and Freddie Mac to establish rates for mortgages purchased by those organizations.
To qualify, buyers’ income and the purchase price of homes must fall within certain ranges. Applicants must occupy the homes they purchase as their primary residence. Prospective buyers can visit www.ebrmfa.org to view the various income and price ranges.
The Authority is also helping first-time homebuyers take advantage of the American Recovery and Reinvestment Act of 2009, which provides an $8,000 tax credit to first-time buyers who close on their property prior to Dec. 1, 2009. This Authority program allows these first-time homebuyers to borrow $8,000. They may repay it when they actually receive the tax credit upon filing their 2009 federal tax returns, or pay it off over 10 years at 6 percent. Participants in this program must use the $8,000 for their down payment and/or closing costs.
The Authority also provides a program for non-first-time homebuyers. This program provides upfront cash in the form of a second mortgage they can use to cover all or some of their down payment and/or closing costs. This program allows borrowers to take out a second mortgage equal to 4 percent of the loan amount and use that money for their down payment and/or closing costs. The 10-year second mortgages are offered at 6 percent interest with no prepayment penalty.
Over the past 30 years, the EBR Mortgage Finance Authority has provided more than $965.3 million in mortgage loans to over 15,127 middle- to low-income households for homes in East Baton Rouge Parish.
The Authority provides the funds, but the mortgages are made available through these local providers: Chase Home Mortgage, Hancock Bank, Homebuyer’s Resource Group, Iberia Bank Mortgage, Regions Bank and SWBC Mortgage.
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.