| In 1994, we set our sights on a house located in | | | | which once burned brightly in their mind's eye - |
| a pleasant, quiet suburban enclave called Bixby | | | | snuffed out, extinguished. |
| Knolls in Long Beach, CA. Although we could | | | | What you must know is it doesn't have to end |
| barely afford the home's $230,000 purchase price | | | | this way. |
| - a fortune for us at the time - it was a small, | | | | Be the Hero. With new information provided |
| neat, modest home situated in a good | | | | through the OFFICIAL LOAN OFFICER GUIDE, |
| neighborhood with appreciation potential. So, we | | | | solutions to the above-described challenges are |
| dove into the home buying market. It was a | | | | placed at your fingertips. |
| perfectly manageable house located in a perfectly | | | | In most real estate markets today, it remains |
| acceptable neighborhood. | | | | virtually impossible for the average consumer of |
| We did not have a clue at the time that home | | | | low to moderate income to qualify for a modestly |
| prices would slowly begin to climb and climb and | | | | sized mortgage without benefit of a substantial |
| climb thanks to an extended period of historically | | | | out-of-pocket investment. Depending on a variety |
| low interest rates. Low interest rates spurred | | | | of qualifying factors, we're talking a down |
| consumer demand, which soon grew to | | | | payment investment equal to 10, 15, 20 or 25% |
| overwhelming consumer demand for homes to | | | | of the home's sales price plus closing costs |
| call their own. Consequently, home prices reached | | | | (points, title, insurance, etc.). |
| stratospheric levels in our neighborhood as well as | | | | Be the Hero. Be the "Go to Guy" for information |
| in most major metropolitan markets (Texas, | | | | about down payment assistance programs and |
| Oklahoma, the Dakotas and a few other | | | | products. Programs like those that are the focus |
| affordable markets being the exception). | | | | of the Official Loan Officer Guide will well serve |
| Ten years later, in the middle of April 2004, a | | | | your marginally qualified borrowers and help |
| devastatingly tragic electrical fire took the lives of | | | | support the real estate industry overall by |
| our beloved Italian Greyhounds, Ben and Rusty. | | | | providing another way to shore up buyer |
| Although we rebuilt our home better than it was | | | | qualifying and loan viability. |
| before, it was still a sad time for us; we ultimately | | | | Be the Hero. Reserve first time home buyer |
| sold our first, "first home". The offers made for | | | | program funds on behalf of your borrower before |
| our modest 1,600 square foot home were | | | | your competition does. When I worked for a |
| obscene - obscene amounts, that is. It was | | | | major national mortgage bank (a bank heavily |
| undeniably the most profitable yet most | | | | vested in first time home buyer loan programs), I |
| heartbreaking investment of our lives. | | | | observed first hand fierce competition between |
| In retrospect, recalling the loan application process | | | | loan officers and competing lenders for the right |
| and qualifying for the mortgage in order to buy | | | | to secure programs funds on behalf of their |
| our perfect little house, well, we recollect that | | | | constituencies - first time home buyers. |
| process was NOT so perfect. | | | | I observed borrowers anxiously await word from |
| In 1994, when we were struggling to qualify for | | | | their loan officer for assurances that they too |
| the mortgage, we were not aware of available | | | | would get their piece of the first time home |
| first time home buyer programs created for folks | | | | buyer mortgage assistance pie. Anything less |
| of low to moderate income. | | | | could, and often did, jeopardize the borrower's |
| Furthermore, our loan officer did not introduce us | | | | ability to qualify for a mortgage and close escrow |
| to these options, either because he was as | | | | on time (if ever). |
| clueless as we were about the existence of such | | | | A growing number of city, county and state |
| programs or, the bank with whom he was | | | | housing finance agencies/authorities/corporations |
| employed at the time elected not to participate in | | | | are creating new and/or fully funding existing |
| specialty programs for first time home buyers. | | | | programs to assist first time home buyers with |
| Neither we nor our loan officer had any idea the | | | | cash money for down payment and closing costs. |
| city of Long Beach, county of Los Angeles and | | | | Monetary assistance can be quite substantial, |
| yes, even the State of California all had available | | | | ranging in amounts from $5,000 to $100,000+ |
| specialty loan programs designed specifically for | | | | (amounts vary by city, county and state) or |
| folks like us: first time home buyers, short on | | | | calculated as a percentage of the home's sales |
| cash for a 20%, 10% or even 5% down | | | | price or a percentage of the first mortgage loan |
| payment, not to mention funds to cover closing | | | | amount. |
| costs. | | | | Be the Hero. Be the first in line to procure |
| We were wholly unfamiliar with mortgage credit | | | | program information, educate your customer and |
| certificate programs, below market interest rate | | | | secure funds for your stressed out client base - |
| programs, mortgage revenue bond programs, and | | | | first time home buyers. |
| we would have given our left arm for help with | | | | Please note, programs addressed in the OFFICIAL |
| no-strings-attached gift money and forgivable | | | | LOAN OFFICER GUIDE are primarily used |
| grant money provided through city, county and | | | | exclusively in conjunction with purchase money |
| state housing agencies. | | | | first mortgage loans with 30 year fixed loan |
| If we only knew . . . the home buying process | | | | terms. Alt-A, sub-prime and non-traditional hybrid |
| would have been so much easier and much less | | | | loan first mortgage loans types are strictly |
| stressful. Driving our decision to buy a home we | | | | prohibited. |
| could barely afford was exacerbated by our | | | | Bottom line? There is hope, and it begins with this |
| landlord's demand we vacate the house, which | | | | quick read, bare-bones approach to assisting the |
| was once rented by my husband and his former | | | | neophyte loan officer and veteran loan officer to |
| wife (the landlord's daughter), within 30 days. | | | | better understand how such first time home |
| Great - no pressure there. . . | | | | buyer programs work in tandem with |
| Fortunately, with the generous help of parents | | | | step-by-step processes and procedures and ways |
| and with a loan borrowed from our 401K, we | | | | to pinpoint available programs in your borrower's |
| were finally able to produce a minimal down | | | | selected subject property city, town and/or |
| payment. Our motivated home seller, an 80 year | | | | surrounds. Some first time home buyers may |
| old retiree who wanted to move closer to her | | | | elect to buy (or not to buy) in a particular city or |
| daughter in another town, helped us pay some of | | | | county based on the availability (or lack thereof) |
| our closing costs through seller concessions. Then | | | | of first time home buyer programs. |
| after all that, we SOMEHOW managed to scrape | | | | The OFFICIAL LOAN OFFICER GUIDE provides a |
| up sufficient funds to substantiate cash reserves | | | | fast track to inside knowledge regarding useful |
| to satisfy our lender and cover our personal | | | | specialty programs created specifically to assist |
| moving expenses after escrow closed. | | | | first time home buyers of low to moderate |
| Did we consider buying new furnishings and/or | | | | income on a NATIONWIDE scale. |
| major appliances to update our 50 year old new | | | | There is a dearth of information available to |
| house? Fuggedaboutit! And THEN we had to take | | | | educate loan officers on a nationwide scale about |
| into account recurring costs associated with debt | | | | the many beneficial programs that are the focus |
| servicing the new mortgage and maintaining our | | | | of this guide. As I complete the writing of my |
| new home like water, electricity, property taxes, | | | | first book on this topic, it is my hope, desire and |
| etc. | | | | intention that the OFFICIAL LOAN OFFICER |
| If your borrowers are anything like we were back | | | | GUIDE: Below Market Interest Rate Programs - |
| in the day, the sticker shock associated with a | | | | Down Payment Assistance Programs, First Edition, |
| new home purchase and maintenance costs can | | | | will serve to educate and empower you to help |
| discourage even the most motivated buyers. | | | | cash strapped first time home buyers produce |
| Timely solutions to the above-described challenges | | | | tangible results in the form of new, affordable |
| may not be easily found or forthcoming at all. | | | | housing that falls within the budgetary means of |
| Notwithstanding the charity of parents, other | | | | all eligible citizens nationwide. |
| relatives and/or through the liquidation of assets in | | | | To you guys and gals in the mortgage finance |
| order to meet most lenders' minimum mandatory | | | | trenches, you are amazing! This book was written |
| requirements for down payment and cash | | | | for you. May you make many a first time home |
| reserves, a substantial number of first time home | | | | buyer and real estate agent happy, satisified |
| buying hopefuls will consequently shelve their | | | | clients by your effective utilization of the |
| Dream of Homeownership. | | | | information contained within this book. |
| This is the sad, sad shelf upon which dust will | | | | Best of luck to you all and happy down payment |
| gather, accumulate and ultimately completely | | | | assistance hunting! |
| obscure the light-filled Dream of Home Ownership | | | | Esperanza J. |