Housing Development Fund Closing the Affordability
Gap
January/February 2007; As originally appeared in The First-Time
Homebuyer
In
southwestern Connecticut, which encompasses the wealthy suburbs
and several cities of Fairfield County, the Housing Development
Fund (HDF), a unique nonprofit bank providing funding for
affordable housing and an array of home-buyer assistance programs,
is not only helping towns and developers increase the number
of affordable housing units, but is also helping close the
affordability gap on market-rate homes. This gap represents
the difference between what a home- buyer can afford to buy
and the actual price of the home. HDF’s efforts are
making a difference for hundreds of first-time home buyers,
many of whom have relocated to Fairfield County from other
areas of the state, often bringing them closer to their jobs.
Founded
in Stamford, Connecticut, in 1989 as a local agency, HDF now
serves all of southwestern Connecticut from its Stamford headquarters
and a satellite office in Danbury. It is the largest nonprofit
organization funding affordable housing in Connecticut.
HDF
offers a number of home buyer finance, counseling, and other
assistance programs, including: its First-Time Home Buyer
Program, providing down payment and closing-cost assistance;
Smart- Move, low-interest second mortgages up to 20% of the
purchase price; and Homeward Bound, a program to move families
from public housing into homeowner- ship. All HDF financial
assistance is either low interest or no interest and paired
with fixed-rate first mortgage loans from one of its commercial
banking partners.
Sources
for HDF financial assistance include pooled funds from commercial
banks, loans, and grants from local, state, and federal governments
and private foundations. HDF is a HUD-certified lender and
counselor and provides new home buyers with the education
and one-on-one counseling required to qualify for its home
buyer assistance programs.
The
HDF process begins with an initial thirty-minute orientation
session where applicants provide the information necessary
to assess their qualifications as home buyers and get the
ball rolling. Home buyer income criteria vary depending on
the program, but most require that buyers earn no more than
a certain percentage of the median income for the area.
Once
potential home buyers are qualified and have completed the
educational requirements, HDF helps put together the financing
package required to purchase either a house or condo selected
on the open market or a below-market rate unit available from
HDF developers or municipal partners.
HDF
staff members are available to explain the steps to buying
a home and can introduce buyers to reliable attorneys, home
inspection services. and other professionals required for
a smooth and informed purchase. After the purchase, HDF remains
available to new homeowners as they face the ongoing challenges
of maintenance, condominium boards, and other responsibilities
of homeownership, including protecting their equity.
“The
first-time home buyers who come to HDF seeking affordable
housing units or help in closing the affordability gap to
purchase homes on the open market all share the dream of homeownership—and
it’s a privilege to help them achieve it,” says
HDF Executive Director Joan Carty. “They work hard and
earn good, steady incomes, although not enough to readily
purchase in high-priced markets. Some not only need financial
help, but may also need to understand how to establish good
credit or how to budget to save more for a down payment. We
help all our buyers make their way through the finance and
home purchase process.”
For
home buyers who want to buy, renovate, and occupy multifamily
homes, HDF provides below-market-rate financing, interim assistance
during the architectural and planning phase, and construction
financing for improvements. This type of financial package
is difficult to find on the open market, particularly for
those without a track record.
Behind
HDF’s programs are a professional staff and volunteer
board of directors—bankers, developers, and municipal
officials—with a commitment to finding creative and
flexible ways to expand housing options in their communities.
“
We help all our buyers make their way through the finance
find home purchase process”
The
Housing Development Fund has its headquarters at 100 Prospect
Street, South Tower Plaza, SP-101, Stamford, Connecticut 06901-1696.
The Danbury Office is located at 8 West Street, Suite 202-204,
Danbury, Connecticut 06810. Additional information is available
by calling 203-969-1830 or 203-798-6527, or by visiting www.hdf-ct.org.
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