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NEW ORLEANS, LA (October 5, 2012) - The Finance
Authority of New Orleans, today announced a change in their 2012 Home Mortgage Bond
Program lowering the upfront cash needed by home loan
borrowers.
The 5% downpayment borrower contribution has been waived,
enhancing the program's accessibility for low-to-moderate income
buyers and providing a competitive alternative to all, including high
income buyers.
"We are pleased that U.S. Bank saw fit to change their 5%
minimum contribution requirement which helps us in our mission of
providing citizens a conduit for low interest home loans," said
Mtumishi St. Julien, Executive Director of The Finance Authority of
New Orleans.
The change is expected to enhance the program by allowing The
Finance Authority to provide local lenders and borrowers another low
interest rate option at 3.25% or an added downpayment grant of 4% (of
the loan amount) for first-time homeowners at an interest rate of
3.50%.
"Because of the mortgage loan industry's recent meltdown
and the nation-wide economic downturn, many mortgage lenders have
tightened their belts and now require 'more skin in the game' from
borrowers. By lowering loan service fees to U.S. Bank and
placing a ceiling on the applicant's debt load to no more than 45% of
the applicant's income, we successfully argued that our borrowers
deserved a waiver of the 5% cash upfront requirement," said St.
Julien.
An added caveat, that has never been available in past
programs, now allows current
homeowners to take advantage of the program's low rates too,but only
if the purchased property will become their primary residence.
Current homeowners may also keep their old home.
"First-time borrowers who need a little help with the
downpayment and high income earners wanting a low interest rate will
absolutely love this program, says Carrie Curet, Vice President and
CRA Community Development Officer at IBERIABANK.
The Finance Authority's
2012 Home Mortgage Bond Program is also combinable with
the City of New Orleans' soft second program; guaranteeing those
buyers an interest rate of 3.25% for FHA loans or 3.50% for
conventional loans.
"City of New Orleans employees were recently approved to
participate in the city's soft second loan program, of course they
can use any financing option, but why not use The Finance Authority's
bond loan? The interest rate is competitive, making it a viable
financing option for city employees as well as the general
public," says Andreanecia Morris, Greater New Orleans Housing
Association (GNOHA) Chairperson and Vice President for Homeownership
and Development at Providence Community Housing.
"The homes we've built in Central City's Saratoga Square
could definitely be purchased through this loan program. I am going
to recommend the program to our potential homeowners as a financing
option," says Nicole Barnes, Executive Director of Jericho Road
Episcopal Housing Initiative located in Central City. "The
interest rate alone is a great incentive, and when paired with the
City's soft second or the 4% grant is added, it's definitely a triple
win for the homebuyer, Jericho Road and The Finance Authority."
"Emphasis should be made regarding the program's
availability ALL buyers interested in purchasing in Orleans Parish,
low-to-moderate, moderate, or high income earners are welcomed.
Income restrictions, which usually preclude participation for higher
income earners, are not applicable in this particular bond program,
so all borrowers, whether or not its their first home, can use this
financing method," St. Julien added.
The Finance Authority's 2012
Home Mortgage Bond Program loans are available at
five participating banks: First NBC, Gulf Coast Bank and
Trust, IBERIABANK, Wells Fargo Bank, and Whitney National Bank.
Applicants are strongly encouraged to visit The Finance
Authority of New Orleans website at www.financeauthority.org
to explore program details or they may call (504) 524-5533 with questions.
The Finance Authority of New Orleans is a public trust created
by the City Council of New Orleans in 1978 under the provisions of
the Louisiana Public Trust Code. Since 1978, The Finance Authority of
New Orleans has issued more than $550 million in mortgage revenue
bonds. Proceeds from these bond issues have been used to finance over
7,000 new homeowners in the City of New Orleans. In addition to
financing home mortgages, The Finance Authority of New Orleans
provides tax-exempt bond financing for public facilities, facilities
owned by non-profits, multi-family housing and all forms of community
& economic development. The Finance Authority programs are
authorized by the New Orleans City Council.
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