Non first tijme home buyers as well as 1st time buyers can take advatage of the low interest loans, please read below for details.
As a sequel to the city’s recently resuscitated mortgage program for low-income first-time homebuyers, the Finance Authority of New Orleans has announced a second similar initiative. But unlike the so-called soft-second mortgage program, the authority’s new bond loan program is available to anyone — rich or poor, first-time homeowners or otherwise — interested in purchasing a home in Orleans Parish, as long as it’s priced no higher than $324,000.
“This is how we make the city of New Orleans come back, ” Mtumishi St. Julien, the authority’s executive director, told the New Orleans City Council last week. The idea behind the low-interest loan program, St. Julien says, is simple: to entice people of a variety of means to invest in real estate in the city.
The 3.25 percent, 30-year fixed mortgages will be distributed through four participating banks: Gulf Coast Bank & Trust, Iberia Bank, Wells Fargo and Whitney National Bank. St. Julien said he is unsure how many homes could be bought before the $12 million pot runs out.
The mortgage program’s 3.25 percent interest rate is a half-point lower than the national average of 3.76 percent, according to the Mortgage Bankers Association.
The program’s companion, the long-bedeviled soft-second mortgage program, was launched under Mayor Ray Nagin, fumbled along and was eventually put on hold altogether by the Mitch Landrieu administration.
Late last year, the city resumed the mortgage program, aimed at low-income first-time homebuyers, with $52 million in federal aid. The program is designed to bridge the difference between a home’s purchase price and the loan the buyer can afford, up to $65,000. Since October, it has committed $7 million and closed on 105 homes, said Ryan Berni, spokesman for the mayor’s office.
Leaders of the local real-estate industry hailed the new program’s broad eligibility.
“It’s important that we have programs available for lower-income families, but everyone is struggling right now — your average family that makes a decent living is still in need of assistance, ” said Letitia Clark George, governmental affairs director at the New Orleans Metropolitan Association of Realtors. “It’s hard for anyone to buy a home in this environment, in this economy.”
The idea is to create a true mixed-income city, St. Julien said, while curbing the notorious problem of blighted and vacant properties.
James Perry, executive director of the Greater New Orleans Fair Housing Action Center, said that, short of creating jobs, subsidizing the housing market is the most dependable way to encourage long-term investment in the city, long plagued by too many homes and too few people able and willing to buy them.
The city, he said, reached its peak population decades ago, and enough housing units were built to accommodate its 600,000-plus residents. The population then began a steady descent — first as the oil industry crossed state lines into Texas, then after Hurricane Katrina — to around 350,000 today, leaving the city with a vast oversupply in housing.
“Somebody who might be on the verge of leaving town might see this and think, ‘Maybe I’ll give it another shot, ‘” Perry said. “Then they have a fundamental commitment to this city — in the form of a mortgage.”
For more information on the bond loan program, visit financeauthority.org.