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 HomeOwnership Program.
Participants in this program come from CDCLI’s existing Housing Choice Voucher Rental Assistance and/or 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 helps them through the home purchase process.
Each prospect is evaluated in accordance with their income so that a maximum of 30% of their monthly gross income goes toward payment of principal, interest, taxes, and insurance payments (PITI). They obtain a mortgage for an amount they can afford through 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, determines the amount of a second mortgage provided by CDCLI, which is made available with funding from the Neighborhood Reinvestment Corporation and other sources.
Each participant also receives services from CDCLI’s NeighborWorks® HomeOwnership Center. At the Center, families learn home maintenance, budgeting, money and credit management, information about a variety of mortgage products, and how to locate and negotiate the purchase of a house. In addition, families are provided with a resource list for down payment assistance programs and to houses being developed by CDCLI and other non-profits and municipalities which utilize State and/or federal subsidies to reduce the purchase price.