HOME SWEET LOAN.

Byline: Randi Bjornstad The Register-Guard

After years of handing money to landlords, brand new homeowner Lisa Esparza says she still has a bit of trouble getting the terminology straight.

`I sometimes still say, `I have to pay the rent.' It's hard to start saying, `I have to make the mortgage payment,' ' Esparza said. "But 'mortgage' is a very good word. It means you own the home - it's yours - and nobody can make you move or say you can't have a pet. Of course, you do have to take care of repairs when something goes wrong."

Her three--bedroom, 1 1/2 -bath version of the American Dream came true through a federally funded program that helps first-time homebuyers put together the down payment and closing costs they need to seal the deal on a home of their own. Often, first-time buyers have the monthly income to afford a mortgage, but have a tough time saving up the cash for a down payment.

Using federal HOME Investment Partnership Program funds, the cities of Eugene and Springfield both offer down payment assistance programs for people buying within their city limits. Several rural versions offer similar help to people in outlying areas.

To qualify for the Eugene and Springfield programs, would-be homeowners either must be first-time buyers or, in some cases, have not owned a home for at least three years. Income eligibility is at 80 percent of the area's median income: $30,650 for a single-person household, $35,000 for a couple, $39,400 for a three-person household and $43,750 for a family of four.

Help with down payment and closing costs comes in the form of a no-interest loan that has to be repaid only when the homeowner sells or vacates the property.

To participate, owners-to-be must complete a home ownership course and be qualified for a mortgage by a lender.

Esparza got into the down payment assistance program through The Homeownership Center, a program of the Eugene-based Neighborhood Economic Development Corporation, or NEDCO.

"I'd been living in a duplex in Springfield, and I was looking for a house to rent. I wanted something better than I had," Esparza recalls. "But it was so hard to find something. If I did find something nice, something I liked, that would take my dog, it would already be rented by the time I got there."

A friend had signed up for NEDCO's "ABCs of Home Buying" class and asked her to go along, Esparza said.

"We learned everything - how to get our finances and credit straight, the vocabulary of buying a house, how to find a good home and a good mortgage - everything important about buying your own home," she said. "They helped me with a money-spending, money-saving plan and everything else I needed to know."

Working with NEDCO executive director Sandy Halonen and her staff, Esparza found just the right house for herself, her sons Steffen, 16; and Ricky, 9; and the family dog, Smokey.

Loan officer Fawnda Thompson at Siuslaw Bank helped her arrange financing, including "piggybacking" more than one available form of federal home ownership assistance to make her purchase even more affordable.

"Fawnda is absolutely wonderful," Esparza said. "If it weren't for her and NEDCO, I'd still be renting."

Esparza paid $141,000 for her two-story, 1,152-square-foot home in central Springfield, Thompson confirmed. She received the following loans to assemble the down payment: $6,000 from Springfield's down-payment assistance program; a $16,000 loan from NEDCO, which sold her the home; $5,000 in HomeStart$$ funds and $1,500 from the Oregon Bankers Association Home Purchase Assistance Program. She took out a mortgage for the balance of the cost.

Despite the attractiveness of available down-payment assistance programs, officials in both Springfield and Eugene say funds have been going begging in recent years.

During the 2005-06 fiscal year, Eugene processed 24 down-payment assistance loans, while Springfield handled 23.

"We had enough funds in the budget to help 45 buyers," said Bob Briscoe, director of Eugene's home purchase and repair programs. "We were really below our target."

Springfield's total likewise fell well under its usual 40.

Jodi Peterson, who works with the Springfield Home Ownership Program, better known as SHOP, says rapidly escalating housing prices during the past couple of years have been the main culprit in limiting the number of clients helped by the assistance programs.

A year ago, Springfield and Eugene raised their down-payment assistance limits to $6,000 from $4,000, "and we did a ton of applications right away, but then we came to a screeching halt again," Peterson said. "Home prices kept going up and up, and $6,000 still wasn't enough to help lower-income people buy houses in Springfield or Eugene. A lot of people had to go to outlying communities where prices were lower in order to be able to buy a home."

In response to a recent recommendation by the regional Housing Policy Board, which includes elected officials from Eugene, Springfield and Lane County, both cities just raised their ceilings for down-payment and closing cost assistance to $10,000.

Now, Briscoe says, the challenge will be getting the word out so that people who qualify can get the help and get into homes of their own.

"It's such a great program," Briscoe said. "A lot of people have enough income to buy a house and make the payments, but they just can't save up enough money for the down payment and closing."

Some, like Thompson, jump at the chance to help lower-income families, while others choose to stick with more traditional forms of lending.

"A lot of lenders won't touch these kinds of financing - there's not a lot of money in it," Thompson said.

"In all honesty, you don't do these loans for the money. You do them because you want to help people, because you truly enjoy doing it."

DOWN PAYMENT ASSISTANCE PROGRAMS FOR FIRST-TIME HOME BUYERS Eligibility: Complete home-buyer's education program; qualify with a lender for a home mortgage; fall within federal income limits; meet $5,000 cap on "liquid" assets.

Eugene Homebuyer Assistance Program: Home purchased must be within city limits, but buyer need not be a city resident prior to purchase. Home must be vacant or owner-occupied before purchase so renters are not displaced. May require $1,500 in personal funds as a match for up to $10,000 in federal assistance. 682-5446 or 345-7106.

Springfield Home Ownership Program: Home purchased must be within city limits, but buyer need not be a city resident prior to purchase. Home must be vacant or owner-occupied before purchase so renters are not displaced. Requires $1,500 in personal funds as a match for up to $10,000 in federal assistance. 726-2358 or 345-7106.

Oregon Bankers Association Home Purchase Assistance Program: Covers home purchase anywhere in state. Requires $500 contribution from lender, seller or other nonstate source as match for $1,500 in assistance. Repayment required at resale, refinance or end of owner occupancy. [phone] or 345-7106.

Oregon Housing and Community Services Purchase Assistance Loan: For use with OHCS Residential Loan Program (see below). Up to $10,000 per family, no interest and no payments due until sale of house. Buyer must contribute the lower of $1,000 or 1 percent of purchase price. 345-7106 or www.oregonbond.us.

HomeStart$$ - Federal Home Loan Bank of Seattle: Provides 3 to 1 match up to $5,000 for down payment and closing costs. For each of first five years, repayment drops 20 percent ($1,000 yearly), with no repayment required after five years. 345-7106.

FEDERALLY FUNDED LOAN PROGRAMS FOR FIRST-TIME HOME BUYERS Oregon Housing and Community Services Residential Loan Program: Below-market interest rate mortgages for families with gross incomes of less than $58,900. Eligible buyers may present completed earnest money agreement to lender to reserve funds; contact www.oregonbond.us or 345-7106.

Rural Housing Direct Loan: Section 502 loans funded directly by federal government for low- and very low-income families to buy in eligible rural areas. Adjusted income must be less than 80 percent of area median; 100 percent financing available for existing dwelling; site and construction of dwelling; or newly constructed dwelling. Available to people unable to obtain other credit but with reasonable credit history; contact 465-6443, Ext. 4, for all requirements or application.

Single-Family Housing Loan Guarantee: Rural Housing Guaranteed Loans by U.S. Department of Agriculture through approved lenders. Available for purchase of primary residence - existing or newly constructed - in eligible rural areas. Adjusted income must be less than 115 percent of area median; 100 percent financing available, possibly including closing costs. Interest rate set by lender with no required down payment. May be used in conjunction with Oregon State Bond Loan program. Call 465-6443, Ext. 4, for information or list of participating lenders/brokers.

- The Homeownership Center of Lane County, a program of the Neighborhood Economic Development Corporation