FL Housing Corp makes $100 million available to first-time homebuyers, for down payments

FL Housing ^ | August 2003 | State of FL

[summer]

Low to moderate income families in the market for purchasing their first homes may be eligible for low-interest rate mortgages and down payment and closing cost assistance of up to $15,000 through Florida Housing's First-Time Homebuyer program.

In November 2002, Florida Housing made $50 million available statewide through participating lenders for families purchasing their first homes. In June 2003, an additional $50 million was made available.

These 30-year, fixed mortgages are available to eligible applicants at a rate of 5.10 percent. This rate combined with down payment and closing cost assistance will further reduce the overall effective interest rate. First-time homebuyers in federally-designated targeted areas and other areas such as Front Porch Florida and HOPE VI communities, and urban infill neighborhoods may be eligible for mortgages with interest rates at 4.50 percent.

The First-Time Homebuyer program is available statewide for the purchase of new and existing single family homes, condominiums, and manufactured homes that meet FHA, Rural Development or VA housing requirements.

Annual income and home purchase price limits apply. For more information about the First-Time Homebuyer program, please select one of the following links [by CLICKING HERE].

[summer]

There is a FAQ section on the above link in the post. I don't know a whole lot about this program, except that I see it linked on the homepage of the state's website at www.myflorida.com (the 4th link under "Hot Topics"). And, I know I've read that Gov Bush appoints people to its Board of Directors, as shown HERE.

There was a State of FL press release I saw not too long ago about the importance of providing low income and moderate income first time home buyers with down payment assistance, and that seems to be the purpose of this program.

Helping people to become homeowners is something I always support, because I know it makes a big difference for kids in school when they live permamently in a house, instead of being transient and constantly moving from apartment to apartment.

[arete]

Very socialist and more big government dependency.

Richard W.

[fuquadukie]

BS. Let them save for their home... just like they should. I am firmly against any such program. Just because you have to rent doesn't make you a transient.

[DC native]

I am forced to agree with you, even if you are a Blue Devil. More socialist soaking of the poor, dumb taxpayer. Get two jobs or borrow the down payment from Mom and Dad. Work out the details yourself, and leave the government out of it.
Go Terps! Oops, who said that?

[dinodino]

This is a lousy program. We taxpayers should not have to pay for this (and yes, I'm a Floridian taxpayer).

[Mulder]

Helping people to become homeowners is something I always support, because I know it makes a big difference for kids in school when they live permamently in a house, instead of being transient and constantly moving from apartment to apartment.

And how is that my problem?

People should screw each other if they can't afford to have kids.

[Mulder]

should= shouldn't

[summer]

August 2, 2003

Housing corporation releases $50M [more] for first-time buyers

Jill Krueger

Florida Housing Finance Corp. is making $50 million in low-interest rate mortgages available to help first-time home buyers.

Because it is becoming harder for first-time home buyers to save up enough money for a down payment and closing costs, the corporation says it will provide up to $15,000 in this type of assistance to eligible applicants through participating vendors statewide.

"The dollars released ... by the Florida Housing Finance Corp. will help hundreds of families realize their dreams," says Gov. Jeb Bush in a written statement.

The interest rate on the mortgages is fixed at 5.1 percent for 30 years. In addition, the corporation has set the mortgage interest rate in areas targeted for urban renewal and neighborhood revitalization at 4.5 percent.

Florida Housing's First Time Home Buyer Program has helped nearly 4,200 people statewide become home owners over the last three and a half years.

For more information about the program, log on to www.floridahousing.org

The above article is available HERE.

[summer]

Since when did lending money to people become wrong? This is not a hand-out - it's making more money available for people to borrow. What's wrong with that? People have to pay it back - with interest!

[summer]

See my posts #8 and 9. I really disagree with you guys on this. Owning a home is literally The American Dream. This program is not exactly giving homes away - it's lending money for people to pay back. Are you going to tell me businesses never borrow money? This program is a lot better than programs like corporate welfare, or the current craze in corporate fraud, IMO. Getting families into permanent homes they own and can afford has kept much of this economy humming! Get real! Not everything is a "socialist" program!!! :)

[sarcasm]

This is not a hand-out

Taxpayer subsidized interest rates are a handout.

[summer]

I think it is remarkable that in this current climate of Gloom and Doom in most states that FL can even afford to encourage new homeowners this way.

[arete]

Social engineering and central planning. It's socialism and creates more dependency on socialist programs.

Richard W.

[sarcasm]

Florida can afford a socialist wealth redistribution scheme?

[summer]

I am finding it very difficult to equate the private ownership of homes, via money that is lent and must be paid back with interest, with any evil plots. Sorry. I am sure there are examples in govt spending that are far more bogus than helping low and moderate income working people to buy their first house.

[summer]

Re your post #14 - I was just pointing out that FL's budget is balanced, we are not in the red, and our financial situation is far better than most states across the country at this time. That's all.

[RedWhiteBlue]

This isn't just making money available for loans that have to be paid back with interest. They are also providing up to $15,000 per applicant to help with closing costs and down payments.

People that haven't learned to save money for a down-payment (like the people that get "no money down" home loans) typically get in over their heads when buying a home. As any homeowner knows, there is a lot more cost involved than just paying the mortgage note every month. Things can and do go wrong and you have to have cash on hand for routine maintenance. Someone that hasn't learned to save for the down payment, either because they don't make enough $$ or they can't control their impulse spending, probably isn't ready for extra costs associated with the responsibility of home ownership.

[sarcasm]

The easiest way to blow a hole in a budget is to expand welfare programs - such as the one that you are praising.

[AAABEST]

LOL. Having fun?

[dinodino]

I am all for prospective homeowners going and buying houses. However, the taxpayers should not have to pay for their low interest loans. These would-be homeowners can save up for down payments just like the rest of us did.

[summer]

Can't ya tell?! LOL...

[dinodino]

No, we can't afford it these crazy programs--no State can. Summer, are you also a supporter of the Florida High Speed Magical Jet Train to the Moon that we now have to build?

[independentmind]

I think under certain circumstances programs to assist first time homebuyers are a good thing. I have to wonder about the wisdom of a program encouraging first-time home buying at this particular time, though, when many feel that most housing markets are on the way down.

[summer]

This is really a very complex, and because I have not yet read everything on that site, I am not doing justice to it. For example, it is not a state agency. In 1980 it was, but in 1998, when Gov Bush took office, it became a corporation.

Now, what exactly that means, I am not sure, but, knowing that Gov Bush likes public/PRIVATE partnerships, I would guess it evolved in some way that conservatives would fine more acceptable.

In addition, 40% of this program's money is to provide CONSTRUCTION loans -- 60% is for the homebuying assistance loans. But, I don't have the answers as to all that this means.

However, when people are able to buy housing, there is a ripple effect in many areas - people start buying appliances, people buy more things for the home that they did not need for apartment living, transient students are no longer transient and school behavior may improve, etc.

No one can ever convince me that buying a first home is NOT a good and positive deveopment.

[summer]

I meant to type: This is really a very complex program...

[summer]

LOL...at the time, I voted for it, and I do like trains, but as far as I know, that whole project has been put on hold.

[summer]

deveopment. = development.

[summer]

PS Thanks for your post here, independentmind. :)

[summer]

would fine = would find

[summer]

Re your post #17 - You may well have some valid points that do apply to some people, but in my experience, I have seen the cost of rent - just paying the monthly rent - can mean MORE MONEY goes out the doo than if the person was paying a mortgage. In addition, I have seen in poorer neighborhoods, when people are homeowners - and NOT renters - there can be a big difference in the way those people look at a job because of their desire to hang on to a house and build equity. It can be very motivating for some people. But I agree, it can overwhelm those who are not mature enough to become homeowners.

[summer]

doo = door

[summer]

PS Hint to when I feel VERY flustered: my typing REALLY s*cks. :)

[steve86]

Helping people to become homeowners is something I always support, because I know it makes a big difference for kids in school when they live permamently in a house, instead of being transient and constantly moving from apartment to apartment.

How will it help the kids when the whole family gets evicted from the house because they can't make the payments -- for a house they didn't qualify for in the first place.

[dinodino]

Welcome to the real world. In the real world, due to personal choices, not everyone can purchase the house of his or her dreams. In the real world, it's not unusual for rent to cost more than a mortgage.

Taking money from the taxpayers and giving out these handouts to boost others' self-esteem is a bad idea.

[summer]

Taking money from the taxpayers

I don't know for sure that this program is taking any money from taxpayers, as I saw a "list of lenders" link. And, since 1998, it is not a state agency. So, you may be totally wrong in your assumption there, though I don't have enough info at hand to go into more detail. Maybe it is partly funded by taxpayers, and maybe not at all. Do you have a link to back up your statement here? (I already tried to look up the lender link again but couldn't find it.)

[summer]

Well, you have to still apply - they could rejected at the start, you know.

[summer]

it's not unusual for rent to cost more than a mortgage.

You're right about that.

[arete]

Let there be housing . . . and lots and lots of refinancing. So says I.

Richard W.

[dinodino]

This is YOUR dance, my Dear. You are the one who posted the info about it and said it's a public/private partnership. Sounds like a soaking of the taxpayer to me.

[sarasmom]

Hi summer!
Have you been hearing any rumblings about "derivitives" in the Fannie Mae and Freddie Mac mortgage investment markets?
I am a renter, and since I do not have "disposable" income,even though I have an unused "VA Housing Loan" certificate, pardon me while I wait for the vastly inflated housing bubble to burst.
Nice of all those kind lending institutions to "spread the wealth" to stable,lower income people pursuing the dream of owning a home, though!
Funny how they would not even consider "lending" all us worthy, lower income people motgages a few years ago...
Tell me, what happens to the "home", after the "owner" can no longer pay the mortgage?
Gasp, could it be, that all those currently nice,future desparate, lending institutions have issues to address while they play games with cash vs cascading, devaluating assets?
No thanks!
I will wait untill I can "afford" a home.

[sarasmom]

Remind me to thank my landlady for her largesse!
To think, all these years I have rented from her, and she has not included property taxes in my monthly payments!
And here I thought she just raised the rent on a whim!
//sarcasm/

[summer]

Hey, if you're happy renting - rent the rest of your life! Plenty of NYers I know will be doing that. Of course, most people have the majority of their wealth in the home they own, and that is not a secret. But, like I said, if you're happy living for years with your landlord (and you don't mind not building up any equity), well, then, keep doing what makes you happiest. I say that with all due respect to you; to each his own.

I am too tired to do a lot of research to answer all the questions on this thread - I still think helping people who want to buy homes is a good idea. And, the more I think about it, the more sure I am that the way Gov Bush does it here with this program is probably different than what posters here on this thread assumed. I say this because that is simply more like him, and I have seen him do innovative things with other programs as well. BTW, here's an article from today's NYT on mortgages, mentioning derivitives (as you mentioned):

August 5, 2003

Surge in Rates Threatens Star of the Economy: Mortgages

By EDMUND L. ANDREWS

WASHINGTON, Aug. 4 — If cheap mortgages have kept the economy afloat, the economy may have just sprung a leak.

A little more than a month after the Federal Reserve reduced its overnight lending rate to just 1 percent, mortgage rates have shot up as investors have soured on the bond market — in part because of confusion about the Fed's intentions in managing the economy.

This has abruptly stalled plans by thousands of homeowners to refinance their houses at even lower rates than they already enjoy. The pace of home loan refinancing has fallen by half the last several weeks, according to bankers and analysts.

If the higher rates persist, they will make it more expensive for people to buy houses or to borrow money against their houses to pay for renovations, furniture and even cars. That would damp a principal source of consumer demand over the last two years, a period when consumer spending has been one of the few sources of economic growth.

Higher rates could also lead to more expensive loans for automobiles; robust car sales have been another pillar of the economy the last few years.

Businesses, meanwhile, still gun shy about spending money on new factories and equipment, may have to contend with higher borrowing costs as well. So will the federal government itself, just as tax cuts and spending increases are forcing it to borrow huge sums to cover the largest deficits in history.

It remains to be seen whether last week's surge in longer-term interest rates is just a blip or the start of a trend. Either way, however, it is remarkable as a demonstration of the limits of the Fed and its chairman, Alan Greenspan, to force the hand of the nation's financial markets.

The Fed may have lowered its federal funds rate, the rate it charges on overnight loans, but investors have ignored the move and pushed up interest rates on longer-term Treasury bonds.

Analysts say a big reason investors are marching in the opposite direction is that they have new doubts about both the Fed's ability and willingness to take drastic steps if the United States slips into the kind of price deflation that plagues Japan.

"It looks to some people now as if the emperor has no clothes," said Sung Won Sohn, chief economist at Wells Fargo, referring to Mr. Greenspan. "The Fed doesn't have much ammunition left, and if they use it, the markets will just demand more."

The astonishing divergence of Fed policy and the reaction of financial markets poses a challenge to Mr. Greenspan, who has until now enjoyed a nearly mythic reputation for his power to make the enormous American economy move to his tune.

Analysts say the Fed's sudden loss of influence stems from several factors. The first is a sudden reappraisal of the Fed's intention; after having fretted for months about the dangers of deflation, suggesting that it would use highly unconventional techniques to flood the markets with money to fight it, Mr. Greenspan backtracked last month to the disappointment of many bond investors.

The Fed also disappointed many investors by cutting the overnight federal funds rate by only a quarter- point on June 25.

On a more positive note, investors are also reacting to new data suggesting the economy may be strengthening after all. If that proves to be true, the Fed would be expected to raise rates at some point in the not too distant future.

Higher interest rates would make bonds, with their fixed interest rates, less appealing to investors. Bond prices would fall to compensate for the decline in demand.

But analysts say there is also an important new technical issue at play, one that may have caught Fed officials by surprise. That issue has to do with the nation's mortgage lenders, who are responsible for more than $5 trillion in home loans.

To protect themselves from borrowers' paying back their loans early, mortgage lenders hedge their loan portfolios in part by buying up Treasury bonds. But as interest rates began to creep up, the nation's biggest players abruptly adjusted their strategy and started selling bonds or derivative securities tied to them. Lower prices for Treasury bonds translate directly to higher interest rates earned on those bonds.

Since mid-June, yields on 10-year Treasury notes, which move in the opposite direction from the prices, have climbed from about 3.3 percent to 4.28 percent today. That affects the rates financial institutions charge for countless other kinds of long-term loans, from mortgages to car loans. Rates on mortgages have shot up more than one percentage point the last two weeks, from slightly over 5 percent to about 6 percent.

Rising interest rates also affect the Federal government's growing budget deficit, which the Bush administration expects to reach $455 billion this year.

Though many economists contend that big government deficits eventually lead to higher interest rates as the government begins to crowd the markets with its huge borrowing needs, most analysts say the recent surge in interest rates is not a result of the newest news on deficits.

Analysts say the increase in this year's expected deficit is tiny compared with the total credit market, and they note that investors were already expecting this year's deficit to exceed $300 billion.

John Makin, a senior economist at the American Enterprise Institute, said the most important reasons for the startling run-up in interest rates lies with the Federal Reserve.

Mr. Makin noted that Mr. Greenspan and other top Fed officials had put heavy emphasis on their worries about deflation, an across-the-board decline in prices. Beyond letting it be known they would reduce the overnight federal funds rate, Fed officials also began suggesting they would use "unconventional" methods to flood the markets with money if the federal funds rate declined to nearly zero.

As outlined by Mr. Greenspan and other Fed governors, notably Ben S. Bernanke, the Fed was prepared, if necessary, to move beyond setting rates for overnight lending and to start buying back longer-term Treasury securities, which would have directly lowered longer-term interest rates.

Expectations about lower long-term rates peaked in mid-June, not long before the Federal Reserve's Federal Open Markets Committee was scheduled to meet to decide on further reductions in interest rates.

As it happened, the Fed disappointed many investors by reducing interest rates by a quarter-point, and it continued to surprise them afterwards by backing away from talk about "unconventional" methods of fighting deflation.

The credit markets soured far more on July 15, when Mr. Greenspan testified before Congress. In that testimony, he was surprisingly optimistic about the economic outlook and led many analysts to believe that the Fed might actually raise interest rates by early next year.

Equally important, according to many analysts, Mr. Greenspan said it was "extremely unlikely" that deflation would pose a big enough risk to require pushing down longer-term interest rates with unorthodox tactics.

"My view is that the Fed has less confidence in the effectiveness of those operations," said Laurence H. Meyer, a economist and former Fed governor. But, he added, investors felt the Fed's conflicting signals had whipsawed them.

Most analysts are convinced last week's rise in interest rates was aggravated by an unusual new technical factor. That factor was the hedging activity of the nation's huge market in mortgages, a market worth more than $5 trillion that is substantially bigger than the market for Treasury bonds.

Mortgage lenders offset the risk that borrowers would repay their loans early by buying up Treasury bonds that guarantee interest rates over 10 years. But as rates began to creep up last month, mortgage lenders expected a big drop in mortgage refinancing activity and began to sell off Treasury bonds. That helped push interest rates higher, creating what amounted to a vicious cycle of rising rates.

Technical issues aside, some analysts say the process might not have started if the Fed had been clearer about its plans. "People were happy to take risks when the Fed was very accommodative," Mr. Makin of the American Enterprise Institute said. "I think they should have left the throttles on full."