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EQUITY Responds: Answers to common questions received from either the Asset Building Community or the Disability Community

I am a person with a disability and I've always dreamed of owning my own home. On my salary, I can't afford a mortgage. Are there programs that can help?

Think homeownership is beyond your reach? As housing prices across the country soar and mortgage rates begin to rise, many people with disabilities believe that the American dream of owning their own home is out of their reach. According to the National Association of Home Builders, based on conventional assumptions and underwriting standards, it takes an income of a little less than $29,000 to purchase a $100,000 home.

While, there is no one magic program to ensure homeownership for people living on low-incomes, mixing and matching a wide variety of homeownership tools can turn the dream into a reality.

Homeownership Alliance Toolbox

This Toolbox contains a wealth of information from a variety of sources, all designed to help you achieve the dream of homeownership.

Steps for buying a home
Homeownership FAQs
Energy efficiency
Financing your remodeling
Affordable housing
Home buyer glossary
Insurance checklist
Credit
Anti-predatory lending
Moving?

How much mortgage can you afford?

Ginnie Mae (see information below on Secondary Market Mortgage Lenders) has developed "Path to Homeownership", which includes a Homeownership Information Center and Three Homeownership Calculators:

Buy vs. Rent Calculator - Buy vs. Rent - Pluses and Minuses. These charts and calculators may help you in making your decision.
Affordability Calculator - With the information you provide, you will receive a general estimate of how much you can afford to spend on a house.
Loan Estimator Calculator - This calculator gives estimates for FHA, VA and Conventional loans based on the home sale price you provide.

Loan Products and Down-Payment Assistance Programs

City First-time Homebuyer Programs and Homeownership Education Classes

Many cities across the country offer programs designed for first-time homebuyers. The Department of Housing and Urban Development (HUD)'s website has information broken down state-by-state, and further by city. Many of these city-based programs include down-payment assistance, access to low-interest loan products, and classes that include information on how to buy and maintain a home of your own.

HUD HOME Investment Partnership Program

Program regulations are at 24 CFR Part 92. HOME provides formula grants to States and localities that communities use-often in partnership with local nonprofit groups-to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people. HOME is the largest Federal block grant to State and local governments designed exclusively to create affordable housing for low-income households. There is no first-time homebuyer requirement for homebuyer projects under HOME. Each year it allocates approximately $2 billion among the States and hundreds of localities nationwide.

AMERICAN DREAM DOWNPAYMENT INITIATIVE (ADDI)

ADDI funds are administered as part of HOME program participating jurisdictions (PJ) to assist low-income families become first-time homebuyers. HOME funds can be used in conjunction with ADDI funds, especially when an investment of more than $10,000 is required. ADDI funds may only be used for down-payment assistance towards the purchase of single family housing by low-income families who are first-time homebuyers. Rehabilitation that is completed in conjunction with a home purchase assisted with ADDI funds is also an eligible activity under the ADDI statute.

Each state receives ADDI funds proportionate to the percentage of the national total of low-income households residing in rental housing in the state, as determined by the most recent available U.S. census data.

ADDI funds can be used for down-payment assistance, or for rehabilitation in conjunction with down-payment assistance, for low-income first-time homebuyers participating in the homeownership option of the Housing Choice Voucher Program. When combining funds from ADDI and the homeownership option of the Housing Choice Voucher Program, the requirements of both programs must be met.

For more information on ADDI, please refer to Title I of the American Dream Downpayment Act (Public Law 108-186, approved December 16, 2003) and the ADDI interim rule at 24 CFR §92.600.

For more information: www.hud.gov/addi/

Secondary Market Mortgage Lenders

The secondary mortgage market enhances the nation's economic growth by providing a continual flow of money - liquidity - for Americans seeking to purchase homes. Homebuyers obtain loans from primary mortgage lenders, such as banks, thrifts, mortgage companies or credit unions. The mortgage lender, in turn, may either hold the loans in its portfolio or package the loans and sell them in the secondary mortgage market. When the lender sells the loans, the mortgage lender can then use the proceeds of the sale to make new loans to other homebuyers in their communities. The secondary market companies turn the mortgage loans they have purchased into securities and sell them to investors on Wall Street. The secondary market then uses the funds from the mortgage-backed security sales to purchase more loans from primary mortgage lenders. By securing mortgages, the secondary market expands opportunities for investors, drawing more funding (liquidity) into the mortgage market.

Fannie Mae

Fannie Mae provides financial products and services that make it possible for low-, moderate-, and middle-income families to buy homes of their own. Fannie Mae is working to expand homeownership opportunities by joining with lenders and community partners to create products and technologies to reach underserved communities, so that more people can own their own homes.

Fannie Mae's Community HomeChoice™ Loans for People with Disabilities
Community HomeChoice is Fannie Mae's newest tailored solution under MyCommunityMortgageTM, designed to serve low- to moderate-income borrowers with a disability, or who have a family member with a disability. The mortgage offers a low down payment of $500 from the borrower's own funds with the remainder from flexible sources. The home buyer can also count rental payments from boarders as income even if the boarders are not related to the buyer.

Find a Fannie Mae approved lender in your area.

Federal Home Loan Banks

The Federal Home Loan Banks are a source of stable, low-cost funds to financial institutions for home mortgage, small business, rural and agricultural loans.

FHLBank Mortgage Programs are helping to expand home ownership by giving financial institutions an alternative, flexible approach to mortgage funding. Although the specific details of the programs vary from bank to bank, in general they allow banks to split the risks from fixed-rate mortgages between the lender and the FHLBank.
Contact the Bank in your Region to find local participating FHLBanks and the Mortgage Programs they offer:

Freddie Mac

Freddie Mac makes housing finance more accessible and affordable for millions of families across America by securing loans directly to financial institutions. They help families to buy their own homes and enjoy quality and affordable rental housing.

As one of America's biggest buyers of home mortgages, Freddie Mac provides a vital link between mortgage lenders and investors. They don't make mortgage loans directly to homebuyers. Rather, they buy mortgages from lenders including commercial banks, mortgage banks, savings institutions and credit unions across the country at astonishing rates - currently one mortgage every 7 seconds - to help finance one in six American homes.

Mortgage Products by Borrower's Need

Freddie Mac secures a number of different loan products for borrower's that have a variety of needs, including low down-payments, credit issues, home repair loans, and more. Talk to your local financial institution to see if they provide any of Freddie Mac's loan products.

Also see the Affordable Homeownership section of the Summer EQUITY Resource Page.

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