New plan helps first-time home buyers

July 22, 2008 2:32:31 PM PDT
First-time home buyers looking for a way into the housing market may qualify for some help from the state.

In communities hit hard by the foreclosure crisis, including Alameda County, the governor has come up with a plan to stabilize neighborhoods and help those looking to buy.

Boarded up windows, dead lawns and 'for sale' signs everywhere. Stockton has the most foreclosed homes per capita in the country.

Governor Schwarzenegger used this ground zero as a backdrop to launch a special home loan program to get people to buy these abandoned properties.

"We want to fill up those empty homes and neighborhoods with stability and create, again, energy in those neighborhoods as quickly as possible. And this program is a step in the right direction," said Gov. Arnold Schwarzenegger (R) California.

Nearly $200 million is available under the state's Community Stabilization Home Loan Program. That'll help 800 to 1,000 first-time buyers purchase a foreclosed home with a 30-year, below-market fixed rate mortgage at 5.5 percent.

There are income and sales price limits. And the property must be located in areas hit especially hard by foreclosures like Riverside, Alameda and Merced Counties.

Not every foreclosed home in the state-designated areas can be bought under this program. Only a handful of lenders are participating and those lenders are listing only certain houses.

Still thousands of homes can be had for bargain prices.

"I have not even owned a home on my own," said potential home buyer "Nancy."

This renter, who only wants to be identified as "Nancy," is excited that this program puts the dream of homeownership within her reach.

"Who would have guessed five years ago that this would happen? Of course, for a lot of people, it's a tragedy. But for some people, it's a wonderful opportunity," said Nancy.

Even more excited about the new effort are residents who live in high foreclosure neighborhoods. They've seen abandoned homes defaced with graffiti or just plain trashed.

"Obviously, that it was going to be distressed property and nobody would take upkeep on it. And so, it was a little bit of blight," said George Clark, who lives near a foreclosed home.

Community Stabilization Home Loans are at no cost to taxpayers, because the bond the state will issue will be paid back with the new homeowners' mortgage payments.

Related information: A list of areas where foreclosed homes may be eligible for first time homebuyers to buy under the new program:

Counties:

  • Merced
  • Riverside
  • San Joaquin
  • Stanislaus

    Zip codes:

  • Alameda County (94601, 94603, 94605, 94606, 94621, 94607, 94608, 94609)
  • Contra Costa County (94565)
  • LA County (90008, 90043, 93535, 93550)
  • San Bernardino (92336)

    California Housing Finance Agency


  • Load Comments