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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (10786)	5/23/2003 7:05:04 PM
From: nextrade!	Respond to of 306849

New low for mortgages, Colorado Housing and Finance Authority State's rate 4.875% for first-time buyers with eligible incomes rockymountainnews.com By John Rebchook, Rocky Mountain News May 21, 2003 First-time, low- and moderate-income home buyers in Colorado can lock in a mortgage at below 5 percent, the lowest rate ever offered by the Colorado Housing and Finance Authority in the past 25 years. Through its MRB First Step Program, CHFA is offering a 4.875 percent, 30-year mortgage to eligible buyers. There is a one-point origination fee paid to the lender participating in the program but no discount points. Across the state, 400 lenders participate in the program. A point is 1 percent of the loan amount, so one point on a $100,000 home would be $1,000. According to HSH Associates, of Butler, N.J., the average rate for a 30-year, fixed-rate mortgage across the country was 5.49 percent on Tuesday. Last week, Freddie Mac put the average mortgage rate at 5.45 percent, the lowest in 45 years. "One of the sweet things we offer is a zero interest second mortgage," said David Martinez, spokesman for CHFA, which was created by the General Assembly in 1973 to provide housing financing for low- and moderate-income households in Colorado. But CHFA didn't start making money available for home loans until 1977-78, Martinez said. "That's a big incentive for someone who needs help with a down payment or closing costs," Martinez said. "The most that can be borrowed is 3 percent of the loan amount, so, for example, on a $150,000 loan that is $4,500." No repayment of the second mortgage is necessary until the home is sold or refinanced or the first mortgage is paid off. In addition, no interest accrues on the second mortgage, and only repayment of the original second principle is required. With all CHFA home loans, the borrower needs to come up with a minimum of $1,000 at closing. Borrowers must also take a mandatory, free homebuying class. "Because we're trying to increase home ownership for modest-income buyers, we have structured this program to give families who have never owned a home the chance to secure this very attractive low-interest money," said Karen Harkin, director of CHFA's Home Finance Division. "Since we limit what our lenders can charge the borrower for these loans, this historically low rate for CHFA creates even more ownership opportunities than ever before." In 2002, CHFA provided a record $415 million in loans that helped 3,400 families. "This year, we would like to exceed that, but given the state of the economy, that may not be possible," Martinez said. "We're impacted by external market forces like anyone else. Realistically, we might be doing well to match what we did last year." And it's possible that market rates will fall even lower than the 4.875 percent that CHFA is offering. "If the market goes a little lower and we're a little bit higher . . . we would encourage people to get a market rate, if they qualify," Martinez said.