Fannie Mae Announces $500,000 in New Down Payment and Closing Cost Assistance Funds to Help Low- and Moderate-Income Arizona Residents.
Fannie Mae's Down Payment Assistance Investment Note (DPAIN) will provide $500,000 in new funds to be made available as loans to Arizona home buyers through the Phoenix IDA.
The Phoenix IDA uses the DPAIN proceeds to fund secured second mortgage loans that finance part of a borrower's down payment or closing costs.
Borrowers can use the funds for the down payment, closing costs, appraisal fees, home inspections, and legal fees.
Loan applicants must first be approved under the Phoenix IDA's new Mortgage Credit Certificate Program, which reduces the amount of a borrower's federal income tax liability, making more income available for borrowers to qualify for a mortgage loan.
The maximum annual income for families to be eligible for assistance ranges from $48,300 for a single-person household to $57,000 for a household of four. The maximum purchase price for a home is $179,934.
Additionally, loans made under the IDA's program can be used in conjunction with Fannie Mae's Flexible 97, a new mortgage for borrowers with very good credit and the ability to make mortgage payments, but who lack down payment funds. These loans also may be used in conjunction with Fannie Mae's Community Lending products.
"Cash for down payments is the number one obstacle for most low- and moderate-income families," said Russ Kolsrud, president of the Phoenix IDA. "This unique transaction with Fannie Mae allowed us to help more families overcome that obstacle and make the dream of homeownership a reality."
"Families looking to buy their first home too often get shut out of the home-buying process because of unanticipated costs," said Phoenix Mayor Skip Rimsza. "The new down payment assistance loan will give Arizona home buyers the extra cash they need to close the deal. My thanks to Fannie Mae and the Phoenix IDA for making the DPAIN a reality for our city."
For decades, public agencies such as Housing Finance Agencies (HFAs) have funded down payment and closing cost assistance programs using their own resources, such as federal block grants, state, and/or local funds.
Federal programs like HOME, however, are stretched to capacity in many states. Alternative financing structures from the private sector, such as Fannie Mae's DPAIN, will help public agencies leverage these scarce resources and redirect funds that currently are used for home- buying assistance for other uses.
"Fannie Mae is committed to increasing homeownership opportunities throughout Arizona," said Elisa de la Vara, director of the Fannie Mae Phoenix Partnership Office. "Down payment and closing cost assistance loans to families trying to buy their first home can be the key to them becoming homeowners."
Fannie Mae closed its first down payment assistance transaction with the Washington State Housing Finance Commission in December 1996.
Since then, Fannie Mae has piloted its Down Payment Assistance Investment Note on a limited basis, purchasing eight taxable down payment assistance notes from HFAs in 1997.
The eight transactions provided $4.4 million in financing to help approximately 1,500 families purchase their first homes. The overwhelming success of the experiment led to its nationwide expansion. Today's partnership agreement marks the first DPAIN program for the city of Phoenix.
For more information about the down payment assistance loan, please contact Joann Hauger at Community Housing Resources of Arizona at 602/631-9780.
Fannie Mae is a congressionally chartered, shareholder-owned company and the nation's largest source of funds for home mortgages. It has committed to provide $1 trillion in targeted lending for ten million homes by the end of the decade.
The targeted lending will serve low- and moderate-income families, minorities, new immigrants, residents of central cities and other underserved areas, and people who have special housing needs.
Over the past 30 years, Fannie Mae has provided $2.5 trillion in mortgage financing for 31 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.
Style Usage: Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae," and the company's stock is now listed on the NYSE as "Fannie Mae." In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."
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|Date:||Oct 5, 1998|
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