Los Angeles County Hero (Home Economic Recovery Ownership could be a big boon for First Time Homebuyers.
Today's Blog will feature a proactive and small solution to our housing crisis.
Just when you thought we were "need another programmed out" Los Angeles County has rolled out the HERO program - Home Economic Recovery Ownership. The program has restrictions but they are not unrealistic or deal killers BUT FOR THE RIGHT CLIENT this type of program could be the difference in getting a home or not. Here are a few bullets points:
- The spirit of the program is to provide a cure for Foreclosed (REO ONLY) and/or Abandoned homes. The seller must agree to discount the appraised price by 15%, which is why FNMA/FHLMC properties are OK, as they have ALREADY AGREED to this component.
- Owner-Occupant ONLY -
- Income limitations - example uses income of $5,000 per month which is OK.
- Debt to Income CANNOT exceed 42% UNDER ANY CIRCUMSTANCE.
- The program is Census Tract driven, which means it is targeted for specific neighborhoods in Los Angeles' 5 county districts. EACH DISTRICT HAS PARTICIPATING PROPERTIES.
- Program has Down Payment Assistance (DPA) component up to $10,000. Example listed below provides borrower $858.25 which can be used towards closing cost - because 1% minimum down does not use all of DPA.
- Borrower must contribute 1% of SALES PRICE (regardless of program used) from THEIR OWN PROCEEDS.
- HERO component is silent 2nd, up to $75,000. Example below uses $53,775.
The bottom line is it deals with Foreclosed (must be REO/Bank OWNED) or Abandoned stock and participants can NOT HAVE OWED a property during the past 3 years. My advice is for those wanting to purchase (starter) this could be their ticket. The program does have limitations but the bottom - line is YOUR HOME IS WHAT YOU MAKE IT.
Finally, there are other components but I support the spirit of the program because it does address a population (property types as well as borrowers) who may not otherwise be in the market. IT IS NOT A CATCH-ALL, but like the Economic Stimulus, Housing Recovery and other programs the adage "something is better than nothing" applies.
(Funding is limited and will be available after March 17, 2009)
Vice President, Chief Bloggeroligist