Recently I received an email requesting information on down payment assistance programs for a specific city. Down payment assistance programs for that city are not listed on myhomedownpayment.com, yet.

Recently I received an email requesting information on down payment assistance programs for a specific city. Down payment assistance programs for that city are not listed on myhomedownpayment.com, yet.

This article is one of six on finding down payment assistance programs in your area. If you are looking for down payment assistance programs anywhere in the country, the following information should help get you up and started.

Recently I received an email requesting information on down payment assistance programs for a specific city. Down payment assistance programs for that city are not listed on myhomedownpayment.com, yet.

This article is one of six on finding down payment assistance programs in your area. If you are looking for down payment assistance programs anywhere in the country, the following information should help get you up and started.

We empathize with the East Coast in the midst of this year’s snow storm. That is, when we’re not busy planting heirloom tomatoes, mixed lettuce and herbs.

Okay, I’m sorry for rubbing it in. When I moved to California, after living in the Midwest, the Big Apple, Savannah, Houston and several other places in between, I was afraid I would never get used to the cultural distance. I love the beach, but it doesn’t replace political conversation, live jazz, dance companies, creative theatre or good restaurants. Little did I know that I would find the love of my life here.

The sunshine tax overwhelmed me. A cottage worth about $75,000 in the rest of the country costs half a million in most of southern California, or did up until last year. When it rains here for more than 15 minutes, you watch your money flying around with the drops on your windshield. Yeah, we know the rain is good, we don’t have any water.

I missed the changing seasons, the snow, crisp fall evenings, the first signs of spring. Then I bought a bungalow in the city on a half acre of land. The backyard was covered with Bermuda grass. You’ve all heard me on that subject. Slowly, but surely, we are getting rid of the BG and planting an organic garden.

I am totally in love. I ooh and aah over the first little green shoots of lettuce. Cry over apricot blossoms. Drool at the thought of heirloom tomatoes. Become orgasmic when the okra blooms. Who would have thought this Midwestern, Northeastern, city urban sophisticate (well that’s the way I think of myself), is at heart just a little old farm girl. Comments from the monkey gallery are not welcome. Food not Lawns!

At this point the question is no longer “can I buy a house” but, “how do I buy a house and benefit from the $8,000 tax credit?”

You also know the basics

1. make sure you have enough in savings to cover a minimum of six months of expenses;
2. have a stable two year income history (I say income history not employment history, because self employment, education, regular seasonal work, social security awards, alimony, stocks, bonds, annuities, and many other forms of income may be used to qualify for a mortgage); and
3. have a one year positive credit history.

If you have the basics covered now you need to find the right mortgage. I believe there are no better mortgages than those offered by government agencies – the FHA 3.5% down payment first mortgage, the VA 100% guaranteed mortgage, and the various mortgages offered by USDA Rural Development. HUD provides a list of approved lenders and home buying education providers in your area. This is where you should start.

Down payment assistance loans and grants can save you thousands of dollars over the life of your mortgage. Visit My Home Down Payment for a description of down payment assistance programs available nationwide and in California and Texas.

Public servants – teachers, firefighters, emergency medical personnel -are eligible for special mortgage assistance. These programs are available nationwide, offered by states and many counties.

Union members may be eligible for first time homebuyer loans and grants. Others should contact their employer’s human resources department and ask if loans or grants are available for first time homebuyers.

If you have a 401K inquire about borrowing funds from your account toward your down payment and closing costs. Using 401K funds will not prevent low-to-moderate income families from qualifying for additional down payment assistance programs. Do this now. Depending on how your plan is administered, you may have to wait several months or an annual quarter to receive funds.

As you move through the process of purchasing your first home (first time homebuyers are generally defined as any one who has not owned a home in three years), post the story of your experiences on housingtales.ning.com. Feel free to vent your frustration and share your joy.

My hope for you is that you will purchase a home for your family this year, share your good fortune with others, and if you purchase a property that another family lost that you will pray for their well being.

The author, Yasmin Sabur, is the founding member of My Home Down Payment, an e-education business promoting mortgage down payment assistance programs for low-to-moderate income families.

What is Income?

Income includes all of the money coming into the household, from all family members 18 years or older.

Begin now to save pay stubs, bank statements, divorce and separation decrees, disability, social security and insurance award letters. You’ll need these documents when you apply for a mortgage loan.

Income Items for Your Budget

Take Home Pay/All family members

Child Support/Alimony

Pension/Social Security

Disability/Other Insurance

Interest/Dividends

Other

(Add the amount of all items to determine your total monthly household income before taxes and other deductions.)

Preparing to Compute Your Expenses

Gather together receipts and bills from several months to compute your monthly expenses. When you can it is always better to use a factual amount rather than guessing or estimating expenses.Set up manila folders for rent receipts with a copy of the related check or money order stub attached. Include folders for pension contributions and statements, savings and checking account statements, car payments, pink slips for vehicles you buy or sell, credit card payments and student loans.

Expenses Items for Your Budget

Rent/Mortgage (include taxes, principal, and insurance)

Life Insurance

Health/Disability Insurance

Vehicle Insurance

Homeowners or Other Insurance

Car Payments

Other Loan Payments

Savings

Pension Contributions

Groceries

Utilities (gas, water, electric, phone, cable, internet, satellite service)

Credit Card Payments

Car Upkeep (gas, maintenance)

Clothing

Personal Care Products

Medical/Dental/Prescriptions

Home Maintenance

Recreation, Entertainment and Dining out (include work lunches)

Child Care

Education

Charitable Donations (include tithes and zakat)

Miscellaneous Expenses

Total Expenses

Income Should be Greater than Expenses

Deduct your total expenses from your income. Your income should be greater than your total expenses if only by a few dollars.

Now, that you know where you are you can begin planning for where you want to go. Hopefully that includes a new home in the near future. Glad to be on the journey towards that goal with you.

The author, Yasmin Sabur, is the founding member of My Home Down Payment, an e-education business that offers advice and information on affordable housing for first time homebuyers. MyHomeDownPayment.com is a national directory of down payment assistance programs for low-to-moderate income families.  

Getting Organized

Start with a loose-leaf notebook and some sharpened pencils. Manilla file folders are helpful in organizing bills and other documents needed for loan applications. Having a business telephone directory on hand or access to a computer is a good idea. After making calls, record the phone numbers, contact name and a short note on the conversation in the notebook under a reference tab.

Rent vs. Homeownership

For some renting makes more sense than purchasing a home. The only way to determine this is by comparing the costs of homeownership to renting.

In addition to mortgage payments (first and second mortgages) taxes and insurance (mortgage insurance and homeowner insurance) must be included in the owning a home column.

The next items in the column should be utilities. For a home these include gas, oil, electricity, water, waste disposal (garbage pickup), and optional telephone and cable costs.

Condominiums and Co-op Fees

Some first time homebuyers decide to purchase condominiums or co-operative units because many of the utility and maintenance costs are included in the homeowners’ association (HOA) fees. Include these fees on the list and remember that all utilities may not be covered. Contact several homeowners’ associations to get an idea of what the HOA fee covers.

Mortgage Credit Certificate

The Mortgage Credit Certificate  program offers a federal tax credit for mortgage interest paid. Most states participate in this program. The credit can be used to increase the homeowner’s take home pay and offset the costs of owning and maintaining a home. Contact area realtors, state and county housing departments and employer payroll departments for information on this program. (The example is for the Texas, but it’s a great explanation of MCC.)

Maintenance Costs

Maintenance costs cover a wide range of items from lawnmowers to roof repair. Trees have to be pruned, lawns mowed, heating systems maintained, windows caulked in cold climates, broken pipes and windows replaced, leaky faucets repaired. Make maintenance costs an item in the homeowner column.

Call local utility companies and work with a local realtor to establish a good estimate of these costs. Always go with the higher estimate.

Home Improvement Grants

Many states and counties offer home repair and improvement grants to homeowners. Homeownership is a requirement for most of these grants. Knowing the eligible areas, property types, and grant uses will assist in determining if the grants can be useful after purchasing a home. Visit My Home Down Payment, and contact state and local housing departments for grant information.

Intangible costs

Mortgage payments, utilities, maintenance and repairs are the tangible costs of owning a home. Intangible costs require another list that should include the following questions:

Why do I want to purchase a home?

Do I have enough time to maintain a home? (Not maintaining a home will decrease the property’s value.)

Can I change a light bulb, mow a lawn, paint the front door, replace a lock, caulk a window, repair a faucet, trigger an electrical circuit, recognize mold or termite damage?

Do I have a tool kit?

Am I willing to make financial sacrifices if owning a home costs more than I am paying in rent now?

What am I willing to cut back on financially to own a home?

Will a major financial emergency (health, car repairs, or job loss) impact my ability to make my mortgage payment?

Do I have a savings account?

If I create a budget will I stick to it?

If owning a home requires a lifestyle change, am I sure (as much as it is possible to be) I want to change for the long term?

How often do I call my landlord to make simple repairs?

Next

If you’ve come this far stay tuned the next article will cover homebuyer’s classes. Questions, comments and stories are always welcome.

The author, Yasmin Sabur, is the majority partner in My Home Down Payment, an e-education business promoting mortgage down payment assistance programs for low-to-moderate income families.

Of course, my sister the former organic cow farmer wouldn’t hear of that. So, we bought all of this black plastic and anchored it into the ground on top of the bermuda grass in a benign effort to do what the Roundup would have accomplished.

In small areas where we planted vegetable and flower beds we used recycled white wood chips from the county dump. Someone told us the white chips were from a wood that prevented the growth of the bermuda grass. That’s what they think.

Bermuda grass has what I call the mother lode. If you mow it down and then hoe the remainder out, you may have to go down a foot or so to find the mother lode. But there she will be in all her glory. Lovely ivory roots spreading out in every direction with brown wiry stragglers bunched into a knot. The stragglers are totally resistant to being dug up and tossed away. Sometimes the roots spread out for several feet. It’s like entering a maze.

I’m a large woman and I’ve learned to place the hoe under the knot and use all of my body strength to pull it out. I think to myself, I just lost five pounds. What I’m losing is the bermuda grass battle.

Note: Gardening is one of the great joys of homeownership. This is one in a series of articles on gardening in southern California. For more information on purchasing a home visit My Home Down Payment.

Well I’m down to okra, eggplant and basil in the garden. The Organic Cow Farmer (OFC) planted some heirloom tomatoes, a gift from the favorite realtor, late in the summer. She now has beautiful pink purple and green softball size tomatoes.

Sooo good. The (OFC) shares, so I’ve been eating onions and garlic softened in a good olive oil, tossing in some okra and eggplant, and then hitting the skillet at the last minute with the tomatoes and basil. Unlike some people, I can eat the same thing every day, so figuring out how to use the over abundance of produce each season isn’t a problem. (Except zucchini, enough is enough.)

Anyhow, I took out the seeds, jumped on the internet to take a look at a southern California extension program planting guide and started preparing the beds for fall and winter.

We’re not organic, but as close to it as we can get. Every season, the first step in planting is to get rid of the bermuda grass (see “Bermuda Grass”). Next I go on a coffee grind run two or three days in a row. A good run may produce twenty or so bags of used coffee grounds from Starbucks.

There are six Starbucks in the neighborhood. They all seem to do pretty good business, and this is not by any stretch of the imagination what you would call a chichi community. I think Starbucks serves a need for a place to just sit and contemplate the world in a pleasant environment where you can invite folks in or not. I should admit that I’ve been known to go on a Starbucks binge – venti Pike Place with half and half – until my heart starts palpitating and I’m running around like a crazy woman, and then remember I’ve been drinking Starbucks every day for the last two weeks and stop.

Let’s focus here.

I cleaned out a new bed for lavender, lantana, bougainvillea, some tall grasses with shorter ground cover grasses and small succulents in front. This is a curved border. I decided to plant green onions in the center of the bed. Worked the soil, added the coffee grounds, some compost from the dump and chicken manure to the old soil, mixed it all together, put the plants and seeds in.

Next, pulling up the squash. The cucumbers this year had a leaf mold and it spread to the squash. Those beds need to be cleaned out and amended. No cucumber or squash family members can be planted there this year or next. Gardening is a win some, lose some proposition. Teaches you to just get over it and move on. The strawberry plants and the basil appear to be happy, they’ll stay them where they are.

What am I planting? Carrots, beets, turnips, broccoli, squash (in a new bed), brussel sprouts, onions, kale, collards, chard, winter tomatoes, lettuce mix, herbs, cauliflower and garlic. The OCF is planting potatoes (several varieties) and garlic. I like the garlic from our seed source – Peaceful Valley – but the OCF doesn’t and is looking for another source. Garlic is grown from the cloves of the bulb, not seed.

Gilroy up the road (ok, a far distance up the road, but in California) is famous for growing garlic but even our local organic food co-op carries garlic from China. I don’t know why.

The pomegranates should be ready for picking next week. The navel oranges are turning from green to pale orange. The Meyer lemons looked liked they weren’t ever going to ripen, but finally they are showing some yellow. A lemon fell off the bush last week and was it was delicious.

If you can’t plant now you’re welcome to enjoy my garden.

Every day I’m grateful that I can read. Ignorance is not bliss. Ignorance is frustrating. It is frustrating for the ignorant person and for those of us who have to deal with ignorance in our daily lives.

After fifteen years in the mortgage industry, there are many things I don’t know and don’t understand about mortgages. So I would advise you to take the following with a grain of salt. You know, I mean, what do I know?

Have you heard any one mention FHA, VA, Rural Development or Public Housing Authorities when laying out plans on how to solve the current mortgage crisis?

The United States Department of Housing and Urban Development – Federal Housing Administration, The United States Department of Veterans Affairs – Home Loan Guaranty, the United States Department of Agriculture Rural Development and The United States Department of Housing and Urban Development Public Housing Authorities are government entities whose stated purpose is guess what? Assisting Americans with affordable housing programs.

One of our presidential candidates has put forth the following plan early in the campaign. “McCain’s aides said his home mortgage plan could help 200,000 to 400,000 people and cost $3 billion to $10 billion. That would be far less than the proposals offered by Clinton and Obama, but McCain aides said it would be bigger than the efforts envisioned by the Bush administration.

The plan would retire old loans that homeowners no longer can pay and replace them with less expensive, 30-year, fixed-rate mortgages that are federally guaranteed. McCain said families would gain “the opportunity to trade a burdensome mortgage for a manageable loan that reflects the market value of their home.”

FHA currently has a program called “Hope for Homeowners.” Straight from the horse’s mouth the program “HOPE for Homeowners may be able to help you, by refinancing your loan into a new 30-year fixed rate loan with lower payments.” Key features of the program are “home retention, new affordable mortgage based on current appraised value, 10 percent equity”, and “[E]quity and appreciation sharing with the Federal government.” FHA guarantees home loans, as do VA and Rural Development.

Do these plans sound similar?

To date, less than 4,000 homeowners have taken advantage of Hope for Homeowners. Why?

Could it be because FHA is under funded and under staffed? I’m going way out on a limb here, so far as to suggest that we might not be in the current crisis, if more families had used government mortgage programs instead of conventional sub-prime loans offered by Fannie Mae and Freddie Mac.

Where is the marketing for this program?

I’m continuing to the outer most branch on the tree and suggesting that putting money into existing government housing entities and allowing them to do what they do best, may be a better idea than creating and funding additional government entities. I’m also suggesting that our government is in deep trouble. If I can read the FHA web site information, why can’t they. Or did an advisor actually read the details of the Hope for Homeowners program and think it was brilliant to put an existing program out there as the candidate’s proposal for saving the country’s distressed homeowners? This is crap.

What would happen if FHA had access to the same kind of advertising expertise that conventional lenders have (had)? Internet banners and pop ups; billboards across American; full page color ads in print media; office to office account executives signing up brokers and teaching loan officers how to analysis loan applications, calculate interest rates and submit loans? Actually asking for the business? In sales, they say you don’t begin selling until you ask for the sale and get your first objection. Then the dance begins. FHA hasn’t even finished dressing.

I’m not suggesting the use of the Ameriquest model of kamikaze marketing – if they don’t buy kill them. And everyone knows Ameriquest employed enough twenty something year old youths to staff another Army. But I am suggesting that lenders successfully marketed subprime products. How did the lenders do that? Can we take a look at what they did and use any of their marketing techniques in an ethical manner that makes folks aware of the government housing programs that already exist?

So, after Mr. Paulson and Mr. Bernake visit Wal-Mart and get some blue jeans and T-shirts (another sales technique, look like your target market so they will identify with you) and sit down with the former Countrywide advertising and marketing executives responsible for the successful sub prime campaigns can we trust them to actually move forward?

Is it too much to ask that the government beef up what we already have and stop reinventing the wheel? Then tell us they have the answer, like a lightning bolt hit them in the head and they got a message of deliverance?

I don’t understand anything about finance on the level that the esteemed financial and economic advisors to our presidential candidates do. Sometimes the simplest solution is right in front of our noses. Some body needs to sneeze.

Put some money into the existing government housing entities.

Develop the marketing plans that get out the message – help is available to distressed homeowners and potential homebuyers. Here and now, already in place.

Hire the staff to make it work (the country is full of unemployed mortgage and real estate folks, put them back to work before they all start developing web sites and writing blogs).

Stop making things complicated.

Do it now.

Somehow, I don’t think this will cost $3 to $10 billion, or $300 billionmuch less $700 billion. But what do I know? Some folks will pay anything for nothing.

Yasmin Sabur

Founding Partner

http://www.myhomedownpayment.com