Tamara Heyward

When we bought our first home, we made a substantial downpayment. We raided our savings accounts and borrowed from our parents. We sweated as the lender combed our credit reports and turned their noses up at our income, student loan debt, self-employed status and work history. We panicked as the lender demanded a lot more money days before closing. And finally we closed. WE WERE LUCKY.

We were lucky that we had savings. Lucky that we had parents that wanted this home for us as much as we wanted it for ourselves – and had the money to help us. Lucky that we found an affordable home in what turned out to be a great neighborhood.

Some people aren’t that lucky. They may be working hard at their job, or at getting an education. Working hard at cleaning up (or maintaining) their credit. Working hard to achieve their piece of the American Dream – which lately seems out of reach for more people. Some people don’t have luck, high paying jobs, or parents waiting in the wings with a checkbook. But they work and they contribute to our economy and our society. Should they have a chance at their piece of the American Dream? I BELIEVE SO.

That’s why I enjoy my work so much. I get to work with first time homebuyers. I get to help them buy an energy efficient, new construction home. I get to help them get a fair mortgage loan with a fixed interest rate. I get to tell them that their city and their state are waiting in the wings with a checkbook, ready to help them make the downpayment that guarantees a low monthly mortgage payment, and helping to ensure that as they move ahead in life, their home can truly be a foundation for wealth.

So many people don’t know that these options are available to them. There are four non-profit developers working in our current neighborhood alone. We don’t have big marketing budgets, so we take alternate approaches. We visit local employers, homebuyer workshops, community events, churches, schools – anywhere we can find ONE PERSON we can help to become a homeowner. We even hire Realtors to list our homes:).

Government deregulation is getting a lot of heat right now as a cause of the mortgage industry meltdown. BUT DEREGULATION WAS NOT AND IS NOT THE ONLY GAME IN TOWN. The government also funds developers and lenders to build affordable homes and make affordable loans.

TO REAL ESTATE AGENTS - If you are working with first time homebuyers, find out about city and state sponsored second loan programs and community developers in your area. Many people come to us thinking that they have to make more money, save more money, and have a high credit score to purchase a home. Some REAL ESTATE PROFESSIONALS thought the only way to get people without a big income and big savings account into a home was with an exotic mortgage. NOT TRUE!

TO FIRST TIME HOMEBUYERS – If you are looking for your first home, do your research. Find out what is offered by local community and non-profit developers. Find out what types of loans are offered by city and state organizations and local, community banks for first time homebuyers. If your lender can’t tell you about these programs – about whether they are available in your area, and explain why they are or are not a good idea for you, FIND ANOTHER LENDER. Same for your REAL ESTATE AGENT (they should at least be able to point you towards the right person to talk to).

Here in North Carolina, there are lots of organizations that exist to service first time homebuyers, and buyers who want a home that can be financed with an affordable, fixed rate mortgage loan. Here’s a short list:

North Carolina Housing and Finance Agency

City of Durham Housing and Community Development

Habitat for Humanity

Self-Help Credit Union

Self-Help CDC

Builders of Hope

Durham Community Land Trustees

Orange Community Housing and Land Trust

Rebuilding Broken Places CDC

BB&T

If you are not in an area served by these organizations, use these as a springboard. Look for similar organizations in your city or state.

The local Durham volunteer network has posted the schedule for the Volunteer Income Tax Assistance (VITA) program on their website. Free tax preparation is available at several sites throughout Durham, NC.

You can see a full list of locations and the schedule for free tax prep by clicking this link:

http://www.law.duke.edu/student/act/vita/index.htm

You may also call the Duke Law Info Hotline for an updated calendar at (919) 613-8526.

Across the state of North Carolina, the State Employees Credit Union is also offering free tax prep through VITA at all of its branches. SECU is also offering a Tax Refund Express Loan, which allows filers immediate access to their refund, but with much lower fees than they would pay at most tax preparation locations.

See information at SECU tax prep at http://www.ncsecu.org/Services/VITAFreeTaxPreparation.html

There is an income limit for eligibility – in 2008, it was $42,000 per household. I have been encouraging those interested in buying their first home with Self-Help CDC to take advantage of this program. Free tax preparation allows filers to avoid the fees charged by tax preparers for refund anticipation loans and other high fee products. Filers still receive their refund quickly (8-15 days with direct deposit to their bank account). In many cases, this refund is enough to help them purchase a Self-Help home.

Don't live in Durham or in North Carolina? VITA is a nationwide program. Visit the IRS website for more information.

Please help spread the word about free tax prep!

Tax season is coming up fast. For some of those who anticipate a refund, that wonderful lump sum is a great way to pay down some bills. For others, it's party time - new car, new clothes, new furniture, maybe even a vacation.

But would you believe that your tax refund can get you into a new house? Yes, I've been watching the news. Yes, I know that many lenders are requiring hefty down payments, or not lending at all. And no, I haven't fallen completely off the turnip truck.

At Self-Help, we've been making responsible loans for over two decades, and selling affordable homes since 1996. From the front lines, I can tell you - it is possible for first time homebuyers without perfect credit to purchase a home with a low downpayment. And a fixed interest rate mortgage.

So, back to this tax refund thing. We're building new homes across the state of North Carolina in the $95,000 to $120,000 price range. We offer some really great features you wouldn't expect in this price range (check them out here), and we help our buyers access low and no interest second mortgages that make their mortgage payments truly affordable.

Our average buyer that uses financing from our partner credit union (Self-Help Credit Union), can purchase with as little as 3% contribution - that includes closing costs. That means as little as $3,000 could move you into a new home, with an affordable fixed rate mortgage.

Interested? Give me a call at 866-265-3488, or drop me an email at Tamara.Heyward@Self-Help.org. We're currently building in Durham, Greensboro, Goldsboro, and Charlotte. A quick phone interview or email form tells you if you qualify - see the (not so) fine print below.

Here's the fine print. Notice that it's the same size as the rest of the print (smile):

• You should be a first time homebuyer. Just means you haven't owned a home in the past three years.
• You should live in the home, and not rent it out. We work hard to put together a great opportunity, because we believe that long term homeownership makes for wealthier, healthier people and better communities. No doubt, owning rental property is a great path to wealth, but that's not the path we're offering.
• You should meet the income guidelines. Our mission has always been to provide opportunities to those that might not otherwise have them. Police officers, school teachers, city employees, medical workers - we've all heard about how these hard workers often can't afford to live near their jobs. Our great financing gives a chance to help, although it also comes with some rules as to how much money our buyers can make.

OPENING THE DOOR TO NEW POSSIBILITIES. COME JOIN US THIS WEEKEND!

OPEN HOUSE AT NEW CONSTRUCTION HOME FOR SALE

1036 Kent Street
Durham, NC 27707
Lyon Park Area

Saturday, October 11, 2008
2:00pm-4:00pm

Tour this new construction home and learn about financing for 1st time buyers. Low monthly payments!

About this home:

1036 Kent Street. 3 bedrooms, 2.5 baths, 1258 Square Feet. This one and one half story bungalow style home features a large open living and dining area and a first floor master bedroom suite, and includes a total of three bedrooms, two full bathrooms, a half bath, and an L-shaped galley kitchen with a breakfast bar that opens to the dining room. The second floor offers two bedrooms and a shared full bathroom, the laundry area, and abundant easily accessible storage. The Arts and Crafts inspired exterior offers a side to side gable roof and a front shed dormer, a covered front and rear porch, and an exterior storage room.

For more information about our homes and our commitment to affordable and fair home loans, visit our website at www.self-help.org/homes-for-sale.

Contact Us:
919-956-4675
OR
Email:Tamara.Heyward@Self-Help.org

Directions
From Durham Freeway (147) North: take Exit 13 (Chapel Hill Street). Turn right at end of exit ramp onto West Chapel Hill Street. Take left turn at third traffic light onto Kent Street. Home is at the corner Kent and Halley.

From Durham Freeway (147) South: take Exit 13 (Chapel Hill Street). Turn right onto West Chapel Hill Street. Take left turn at second traffic light onto Kent Street and follow directions as above.

From downtown, take West Chapel Hill Street. Cross Durham Freeway and follow directions as above.

Click on the map to print directions from your location.

Credit Suisse has reported that a second wave in the foreclosure crisis may be on the horizon. Option ARMs, which I've probably ranted about enough (see Wachovia Reigns In Pick-A-Pay Parts I and II), are scheduled to start resetting en masse around 2009, with the most reset volume coming in 2010-2011. A particularly onerous feature of these loans is that even if your first scheduled reset is five years, the loan can reset sooner once your negative amortization reaches a certain point.

The payment shock is expected to be much more severe for option ARMs than for subprime ARMs. You think a 10% increase in your payment was bad, wait til you see the projected 80% increase that will happen with some option ARMs. According to an article at BusinessWeek's website, the good news is that a combination of action by the lending industry and the government could help prevent some of the damage.

Tom Kelly has also posted a good article over at Inman News explaining how the negative amortization reset works.