EBR Mortgage Finance Authority commits $40 million to local homebuyers

September 12, 2007

BATON ROUGE— In a sign of Baton Rouge’s robust residential real estate market, growing population and a temporarily changed federal lending rule, the East Baton Rouge Mortgage Finance Authority has committed in six months the entire $40 million it had available for low and middle-income residents.

“This is the first time since the local real estate boom of the early 1980s that we’ve used up our entire bond sale allocation in six months,” said Astrid Clements, the EBRMFA’s chairman. “This tells us that the Authority’s below-market interest rates and financial assistance package to borrowers is working to get Baton Rouge residents into their own homes.”

The Authority initiated its $40 million program on March 1 to help moderate and low-income East Baton Rouge Parish residents purchase their own homes. The entire $40 million was committed to borrowers by Sept. 6. The Authority will decide before the end of this year whether to release a new bond issue to meet anticipated continued strong demand for its mortgages.

“While much of the rest of the nation is going through a real estate slump, demand continues high in Baton Rouge for the reduced-cost mortgages provided by the Authority,” Clements said. “Home ownership is more than something to which most families aspire—the real estate and home-building industries are major contributors to our local economy.”

The Authority offers a variety of assisted and unassisted loan products at interest rates typically about a quarter of a percentage point below conventional rates. In addition, the Authority provides assistance grants of 4 percent of the loan amount to help borrowers pay a portion of their down payment and/or closing costs.

To be eligible for the EBRMFA loan program, borrowers must have an annual income of $67,440 or less for a family of one or two people, and $78,680 or less for a family of three or more. The maximum purchase price for a home under the program is $289,704.

Until recently, the Authority’s mortgage program was restricted to first-time purchasers. A temporary change in federal regulation due to the hurricanes that hit the Gulf Coast states in 2005 now allows the Authority’s mortgage program to apply to borrowers who previously owned homes. The Authority does not provide loans directly to consumers. The Authority provides the funds but the mortgages are made available through these local providers: Chase Home Finance, Countrywide, Gulf Coast Bank, Hancock Bank, Homebuyer’s Resource Group, Home Loan Corp., Iberia Bank, LA Real Estate Finance, Regions Bank and Whitney National Bank.

Prospective homebuyers should contact one of the lending agencies directly.

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