Government program aims for new buyers

October 19, 2009 12:00:00 AM PDT
The housing market got another boost from the Obama administration on Monday. A new program will help low and middle income home buyers to get low mortgage rates and lower down payments.

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The goal of the new program is to put homes like this within reach of new home buyers.

"First time home buyers who make somewhere in the range of $60,000 to $100,000 purchasing homes that would be priced anywhere from $150,000 to $300,000 or $350,000," says Contra Costa County redevelopment director Jim Kennedy.

The plan calls for the federal government to help local finance agencies, which have had a tough time since the housing market tanked. Those agencies will then be able to offer a lower interest rate and accept a lower down payment

"This is a first-time homebuyer mortgage assistance program that provides an avenue for people to achieve home ownership," says Kennedy.

The program is brand new and local officials say they will be figuring it out as they go and because of that, they don't think the money will hit the streets until March. Still, some realtors say that is ok because there are already plenty of buyers out there right now.

"There's probably 20 to 30 offers on every property," says realtor Stephanie Fordham.

Fordham has piles of offers on her desk -- one home received 52 offers last week. She sells foreclosed homes for Fannie Mae. She says people are trying to buy now because of another government program -- the federal income tax credit which is worth up to $8,000. It expires at the end of November, but she says it's not just the government that's pushing people to buy.

"I don't think it's just the programs really, I think it's the low prices," says Fordham.

From her perspective, the market needs a different kind of help.

"I think what the government needs to focus on is how to stop people from foreclosing," says Fordham.

The program also helps renters. The Obama administration says this won't cost taxpayers a dime and it is expected to help thousands of people.

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