- The Washington Times - Wednesday, February 11, 2004

Some of the most underused home financing groups are the nationwide offices of state housing finance agencies.

These are state-chartered authorities that help meet residents’ housing needs. Not all HFAs are created equal in regard to their relationship to state government, however. Most are independent entities operating under the direction of a governor-appointed board of directors.

HFAs administer scores of affordable-housing and community-development programs, which center around three federally authorized programs: the Mortgage Revenue Bond (MRB) program; the Low Income Housing Tax Credit program (Housing Credit); and the HOME Investment Partnerships Program (HOME).

The National Council of State Housing Agencies (www.ncsha.org) says HFAs have used these programs to design hundreds of housing programs, “including homeownership, rental, and all types of special needs housing. Many NCSHA member agencies also administer other federal housing programs, including Section 8 and homeless assistance.”

HFAs have provided affordable mortgages to more than 2.4 million families to buy their first homes through the MRB program. HFAs also have financed more than 2.4 million low- and moderate-income apartments, including 1.6 million apartments using the Housing Credit.

In addition to the bond programs, some HFAs partner with Fannie Mae, the Federal Home Mortgage Corp. (Freddie Mac) and other investors to provide money for these types of loans, usually with a below-market interest rate.

The loans customarily have limitations, such as income and size of household.

For the housing authority that serves your area, search online by typing in “[your state] housing authority,” or contact your county government. The NCSHA also maintains a list of online links to HFAs at its Web site (www.ncsha.org/section.cfm/4/39/187).

There are many private, nonprofit housing agencies that help people get into a home of their own. Housing agencies offer home-buying education, money for down payments and low-interest loans for qualified buyers.

In a sellers’ market, the HFA financing can bring down a buyer’s cost of getting into a house and limit the monthly payment through below-market interest rates.

Some have hard-to-understand restrictions, however. One program will assist a buyer with financing for a house but won’t include kitchen appliances. Savvy sellers get around that provision by selling the appliances separately for a token fee.

Some programs will allow only a limited amount of appreciation to go to the buyer. The idea is that with the special program, combined with lower interest rates and government-based funding, the HFA wants to help low- to moderate-income consumers get into a home, but they don’t want to help them profit by a market gone wild.

Look at all the fine print when getting into an HFA-based program. I believe you’ll find that for low-income, cash-strapped purchasers, it can be a great help in realizing the American dream.

M. Anthony Carr has written about real estate for more than 15 years. reach him by e-mail (manthonycarr@erols.com).

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