For those of lower income, and those who are dependent upon assistance programs, the dream of home ownership may only be achieved through provision of additional subsidies and innovative financing, as embodied in our Voucher Home Ownership Program.
Participants in this program come from CDC’s existing Housing Choice Voucher Rental Assistance and Family Self Sufficiency Programs. Many of these households need assistance in household budgeting, savings planning, and credit clean-up to assist them in their move toward home ownership. As prospective home owners develop capacity to search for a home and apply for a mortgage, the counseling staff will help them through the home purchase process.
Each prospect is evaluated in accordance with their income, so that no more than 30% of their monthly gross income goes toward payment of principal, interest, taxes and insurance payments (PITI). They obtain a mortgage for an amount which they can afford from a conventional (or FHA-insured) lender.
The difference between the conventional mortgage amount that the applicant can afford, and the purchase price of the home, less the down payment, will determine the amount of a second mortgage to be provided by CDC. CDC will make these mortgage funds available with funding from the Neighborhood Reinvestment Corporation and other sources.
Each participant will also receive services from CDC’s HomeOwnership Center. At the Center, families learn home maintenance, budgeting, money and credit management, information about a variety of mortgage products, how to locate and negotiate the purchase of a house, and the like. In addition, families will be assisted with linking to down payment assistance programs and to houses being developed by CDC and other non-profits and municipalities which utilize State and/or federal subsidies to reduce the purchase price.