Fund helps 1st-time homebuyers

January 14, 2007; As originally appeared in The Connecticut Post's Your Money by Rob Varnon

The Housing Development Fund Inc. celebrated the 500th successful completion of its First Time Homebuyer Program this month.

“ It’s a dynamic number,” said HDF Executive Director Joan Carty.

In this program, a success leads to a family owning their own home. Carty said the group has only had two foreclosures in its history.

An immigrant family moved into the 500th home last month, but Carty said the program helps a wide variety of people whose one commonality is
they have never owned a home.

“ Most of the people are the first in their families to ever buy a home,” Carty said.

HDF, a nonprofit founded in 1989, oversees several programs for people of low-to-moderate incomes interested in owning their own homes. The group helps participants find federal, state and private programs where they can get access to low-interest loans.

Because of the rise in home prices, Carty said some of these programs allow people making up to $96,000 a year to participate.

A recent study by DataCorps Partners’ Economist Donald Klepper-Smith indicated that a person making the median income of more than $60,000 in Connecticut no longer qualifies for a loan to buy a house selling at the median price of $287,000.

In order to qualify for a mortgage at the median price, a person would have to make more than $80,000, according to interest.com’s Web site.

In a report using 2004 data, the U.S. Census Bureau found 807,000 of the
1.33 million households in the state did not make more than $75,000.

But it’s important for people to realize this is not a hopeless situation, and that’s what celebrating the 500th home is about, Carty said.

“ We can make it possible,” she said.

They do that by reviewing people’s finances and making sure they are prepared to buy a home, she said.

Participants need job stability and income to qualify for loans, because it doesn’t do any good to put people into a home they will lose later on because they can’t afford it, Carty said.

She said HDF workers also review taxes, electricity and other costs to make sure people can afford a home.

Valencia Taft-Jackson, vice president of People’s Bank’s affordable lending group, said there are more programs to help people buy than ever before.

Not only are there low-interest mortgage programs, she said, but prospective homeowners also can now find down payment assistance programs.

Because it’s so expensive to live in Connecticut, “Most people can’t save up for a down payment,” Taft-Jackson said, citing high energy and transportation costs.

As a result, she said, people have to take out two loans to buy a home — one for the mortgage and one for the down payment.

In Fairfield County, the down payment can be about $20,000 to $30,000, according to Taft-Jackson. Without a down payment, homeowners are required by law to purchase private mortgage insurance, which is often more expensive than taking out another loan to cover the down payment, she said.

People’s is one of the HDF’s supporting institutions. Like other banks in the area, it holds classes for first-time homebuyers during the year.

Taft-Jackson said the next class in Bridgeport will be in March.

People who wifi need assistance to buy a home must complete programs like this to be eligible for low-interest loans. The programs usually take several days, and include discussions with real estate agents, lawyers and house inspectors.

Carty said her group has counselors available, and people can call to discuss what they need to do.

According to Carty, her group is helping to keep Connecticut’s economy growing by making sure the middle class doesn’t disappear in the face of outrageous prices.

“ We’re helping working- class and middle-class people get a toehold.”

To contact HDF call 969-1830, or visit www.hdf-ct.org.

Rob Varnon, who covers business, can be reached at 330-6216.