This new program is funded through the Federal New Issue Bond Program. It aims to make mortgage funding available to home buyers who meet specific qualifications. One of those qualifications is that the home must be located in the “target area”. No information was immediately found that would define what the “target area” was/is, but we do know that it’s going to be certain areas within the city limits of Atlanta, GA.
The 30-year fixed rate loans will carry a below market interest rate of 3.5% and may also include a whopping $50,000 in down payment assistance. This is truly an aggressive program. Buyers must also take a home ownership seminar approved by the Atlanta Development Authority.
The Housing Finance Agencies in any major city may qualify for access to some 15.3 billion in funds that has been created for this project, through bond sales packaged by Fannie Mae as Mortgage Backed Securities, and financed through bond purchases by the U.S. Treasury. The funds are essentially divided by the various HFA’s for distribution in the form of new mortgage loans for properties in urban areas targeted for development.
Buyers must meet specific underwriting criteria and contribute up to $1,500 in closing costs. A borrower who is using the $50,000 in down payment assistance may borrow a maximum of $252,890. Borrowers who do not use the down payment assistance program may purchase a home with a maximum purchase price of 374,268.00.
While this program announcement was made in Atlanta, GA, the Housing Finance Authorities in other major cities are slated to receive funds for this program as well. For local information, check with the local Housing Finance Authority in your city. This article was specifically referencing single family mortgages, but my understanding is that there are funds available for multi-family projects as well. Those projects must also be in areas targeted by the local Housing Finance Authority.