by Miranda G. McLeod
Staff Writer
The Jacksonville Housing Finance Authority recently released $12 million in single-family mortgage revenue bonds to provide low-interest mortgage financing and downpayment assistance to eligible homebuyers.
Mayor John Peyton announced the program in August and loan reservations started Oct. 3, but only two loans had been processed by the end of November. Some say the program isn’t moving forward because no one knows about it.
This is the first time in five years the bonds have been released, and more money is available. The authority wanted to make sure the city has inventory that meets the parameters of the program before other bonds are issued, according to Denise Wallace, chair of the JHFA.
“We’re new at this,” she said, adding they’ve pushed to spread information about the program to members of the real estate community.
At a recent Northeast Florida Builders Association seminar on mortgage revenue bonds, Wallace, along with Wight Greger of the Housing and Neighborhoods Department and Tim Almquist of Countrywide Home Loans, explained the program to lenders, builders and some Realtors.
Several interested homebuyers were turned away from the seminar because it was for industry members only. They were handed a list of approved lenders to contact for more information.
Mortgage bond loan programs are designed primarily for low- and middle-income families who are first-time homebuyers. The advantages to borrowers include below-market interest rates, downpayment assistance grants and second mortgages that can be used for downpayment assistance and/or closing costs, according to Almquist. His company is the program administrator and master server of the mortgage revenue bond program in Jacksonville. Countrywide has also trained and approved a pool of lenders to facilitate the program.
The bonds are allocated on a first-come, first-served basis and carry a 5.6 percent fixed rate. They target workforce housing, including first time homeowners who haven’t been the principle on a home in at least three years, those who have an income of less than roughly $90,000 for a family of four and people buying a home for less than $245,000.
All borrowers are required to pay $1,000 towards closing costs and all loans must be purchased by Dec. 31, 2007.
The bonds also focus on tracts in Jacksonville that are primarily Downtown and in the northwest quadrant. There are 10 targeted area census tracts, which are defined by the Federal Tax Act as areas having 70 percent or more families earning an income 80 percent or less of the statewide median family income and areas of chronic economic distress.
People buying homes in the census tracts do not have the same first-time homebuyers requirements and have higher income and purchase-price limits. The maximum purchase price limit for a non-targeted property is $247,500. The maximum for a targeted property is $302,500.
Properties not allowed in the program include rental homes, co-ops, investment properties and recreational, vacation or second homes.
Almquist also noted homes used as child-care facilities are not accepted in the program. Borrowers can’t use more than 15 percent of their residence as a trade or business facility, including child care.
The JFHD will take feedback from the lenders to see how to fine-tune the product when more money is released.
“We want to make sure there is a market for the program,” said Wallace. “We have the ability to do $30 million to $40 million bonds, but we weren’t comfortable approving anything else until we were sure there was a market.”
Greger said city government applied for loans from the state in June and the JFHD was also approved for $29 and $40 million in bonds, but it won’t commit to releasing the money if there isn’t a market.
“We want to make it user-friendly,” said Wallace. “We want to put $29 million on the street and [have] it be gone in two days. It’s for workforce housing. The question to [Realtors and lenders] is, ‘Is there a need for this product?’ ”