By David Pendered
Atlanta’s development arm has created a loan program that aims to entice buyers to purchase or refinance a home in the city, where persistently falling prices have made homes both affordable to new buyers and hard to refinance for existing owners.
Invest Atlanta’s new “Home Atlanta 4.0” program is available, in certain neighborhoods, for homes with a purchase price of up to $374,268. The limit on household incomes is $87,400 for one person, and $112,350 for a family of three or more.
The new program provides 30-year, fixed-rate private mortgages to buyers, in addition to a 5 percent grant to help the buyer cover costs associated with downpayment and closing, according to a statement from Invest Atlanta.
“This is a tremendously exciting public private partnership for the city and its residents,” Dawn Luke, managing director of housing finance for Invest Atlanta, said in a statement. “It provides higher income and purchase price limits than our other homeownership programs, and it presents no financial risk to Invest Atlanta.”
Terms call for buyers to use a lender approved by Invest Atlanta. Loans are to be sold to master servicer U.S. Bank National Association. Ultimately, the loans will be pooled with other mortgage-backed securities and sold to Raymond James/Morgan Keegan, according to a statement from Invest Atlanta.
The program arrives at a time average housing prices in Atlanta have continued the downward spiral that began in April 2007, according to the Case-Shiller Home Price Index.
That is good news for buyers, but not so good for existing homeowners. Many owners who owe more on their loans than the value of their home find that lenders will not even return calls.
Meanwhile, the economic picture for home buyers remains spotty.
Metro Atlantans have cut their credit card debt by 0.8 percent in the past year, according to a report in September from Atlanta-based Equifax. Analysts interpreted the reduction as an indication that consumers are fearful of taking on new debt and, instead, are trying to pay off existing loans.
The jobs report issued this week by the state Labor Department shows improvement. But the job creation has not gone nearly far enough to employ all those in metro Atlanta still looking for jobs with incomes high enough to replace those lost during the recession.
In the face of this economy, Invest Atlanta offers a number of programs intended to help both buyers and owners, and the real estate market.
An example of another popular program from Invest Atlanta supports homebuyers along the Atlanta BeltLine.
That program provides up to 20 percent of the purchase price of a home that’s located within the special tax district created to build the public amenities such as sidewalks.
But that program comes with more restrictions than the one rolled out this week by Invest Atlanta. For the BeltLine program:
- Maximum assistance is $50,578;
- Maximum home price is $252,890;
- Annual household income eligibilities are up to $71,200 for one or two persons, and up to $81,800 for three or more persons.
Mr. Pendered, this post is not consistent with the HH income information for HOME 4.0 provided at the Invest Atlanta website. A single-person HH may earn up to $64,974 to take advantage of this program rather than $87,400.
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