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TEACHER AID EDUCATORS GRADUATE TO HOME OWNERSHIP.

Byline: GREGORY WILCOX Staff Writer

For 10 years, school teacher LaMoin Earl Garrad rented a house on a nice Glendora street and watched in frustration as housing prices soared beyond his budget.

``Renting is just a bottomless pit,'' said Garrad, whose teacher wife gave birth to their first child a month ago.

Thanks to the California Housing Finance Agency, the Garrads are not renting anymore.

Last year the couple spotted an advertisement for the agency's Extra Credit program -- which is tailored for teachers like Garrad and other school employees who can not afford to buy their first home.

They qualified for the program and last summer paid $440,000 for their dream home -- the one they were renting. They snapped it up when their landlord cashed out of California's smoking hot real-estate market.

``Oh my God it was looking bleak,'' Garrad said of the dream of homeownership. ``This is almost a half a million we're financing. It's really incredible. We really enjoy our home.

``And it's wonderful to come home. It's something that we own and we know now we've got our house and our retirement.''

Others not as lucky

But the Garrads are among the lucky few working class families who had access to financial assistance that helped them get into their all important first home. Some programs are also available, including some for police officers and firefighters as well as other people who meet income qualifications.

But even with this kind of assistance getting into that first home can be a daunting challenge, primarily because of the high cost of housing.

While sales have fallen off record levels, prices have not followed them down.

For example, just last month even though sales in Los Angeles County tumbled an annual 12.9 percent, the median price of a home climbed 6.5 percent percent to a record $522,000.

The picture is just as bleak in the Inland Empire, long one of the region's most affordable markets. Sales in San Bernardino County fell an annual 31.1 percent but the median price rose 3 percent to $372,000.

These remain the kinds of markets where the nurses, police officers, firefighters, teachers, janitors and other workers who look out for the community can not afford to live in it.

Priced out of market

Earlier this month the Washington, D.C.-based Center for Housing Policy released a study that showed many of these workers are priced out of homeownership in the majority of the nation's cities. It focused on 200 metropolitan areas and 60 professions.

Among its findings:

In the Inland Empire during last year's third quarter the median home price was $393,000 and the minimum income needed to buy it was $134,629 with a 10 percent down payment. But an elementary school teacher's salary averaged $51,473; a police officer's, $50,026; a nurse's, $40,570; a retail sales persons, $26,878; and a janitor's, $25,924.

In the Los Angeles metro area, which includes the San Gabriel Valley, Long Beach and the South Bay as well as the San Fernando and Santa Clarita valleys, the median price in the third quarter was $523,000 and the minimum qualifying income was $179,163.

But a teacher's salary in the area averaged $53,687; a police officers's, $52,178, a nurse's, $42,316; a retail sales clerk's, $28,036; and a janitor's, $27,040.

Jeffrey Lubell, the center's executive director, laments the lack of affordable housing.

``We need to do more. There is a lot of help that is needed. Things have gotten consistently worse since the third quarter of 2003,'' he said.

Just in Los Angeles county housing prices soared 56 percent over that time span. Yet Lubell notes that residents support some kind of effort, offering as proof the fact that a manor of Los Angeles city voters supported a housing bond measure in last November's election even though it did not get enough votes to pass.

Do your homework

The first thing prospective buyers should do is contact the city they live or work in. Most offer home-buying assistance. Some have more ambitions plans than others.

Last year Neighborhood Housing Services of the Inland Empire helped 110 families buy their first house.

The agency administers a variety of downpayment assistance programs and offers a 16-hour home buying class.

``The challenge for us is that families of low to moderate income have a much wider (income) gap than they've ever had before to get into that first home,'' said Marianne Giblib, the agencies interim executive director.

And it's not uncommon for the agency to help arrange five layers of financing for that first home, she said.

Another good source is the California Housing Finance Agency. This is a state agency that acts like a bank and it's mission is helping folks by their first home.

It offers a variety of loan programs and down payment assistance.

Purchase price limits are generally higher than Fannie Mae and Freddie Mac's and are adjusted every six months.

For example the two big mortgage companies have a conforming loan limit in California of $417,000, unchanged from last year. That's the largest mortgage they can buy.

But CalHFA has loan limits for both new and resale in each county. In Los Angeles and San Bernardino counties the lending limits are much higher than Fannie's and Freddie's.

Interest only, with a twist

Assistant marketing director Evan Gerberding said that there are three types of loans available with fixed interest rates for terms of 30, 35 and 40 years. On the 35-year loan the borrowers just pay the interest for the first five years, but the rate is fixed for the entire time. This means the borrower knows exactly how much the payment will increase.

``A lot of other interest only products have an adjustable mortgage rate so after five years (the payment) can shoot way up,'' she said.

``And the borrower finds himself in trouble because he can't make the payments.''

The California Public Employees Retirement System also has a home loan program for all of its members.

It's been around for 25 years and made 127,000 loans totaling $20.5 billion, said spokesman Brad Pacheco.

The City of Long Beach's Housing Services Bureau is currently revaluating its loan program but continues to offer first-time buyer seminars each month and a post buying seminar every quarter.

It had been offering up to $10,000 in downpayment assistance.

``It used to work before but with real estate prices where they are now it doesn't make a dent,'' said Ellie Tolentino, the bureau's acting manager.

greg.wilcox(at)dailynews.com

(818) 713-3743

Places where first-time home buyers can find financial assistance

The California Housing Finance Agency has a comprehensive Web site. Income and loan limits are available by county. Many also have limits for economically distressed areas.

Web: www.calhfa.org.

Phone: (877) 922-5432 (Sacramento)

(310) 342-1250 (Culver City)

Neighborhood Housing Services of the Inland Empire has a Web site with links to home-buyer education and down-payment assistance. Prospective buyers should call first and speak to a counselor.

Web: www.nhsie.org

Phone: (909) 884-6891

CAPTION(S):

2 photos, box

Photo:

(1 -- color) LaMoin Earl Garrad and his wife, Angelica, with baby daughter Italia are finally at home with the assistance of CalHFA.

(2) LaMoin Earl Garrad and his wife, Angelica, teach at the same elementary school in Los Angeles and thus qualified for the CalHFA Extra Credit program. The house they bought last summer is the one they were renting.

David Sprague/Staff Photographer

Box:

Places where first-time home buyers can find financial assistance (see text)
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Date:Jan 28, 2007
Words:1275
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