Local Non-Profit, AG's Office And Five Banks Team Up For New Home Loan Program
There’s a new option for potential homebuyers who’ve been unable to secure a conventional mortgage loan because of low income or shaky credit.
Local nonprofit group, Community Ventures Corporation, with $5 M from the state Attorney General’s office and 5 area banks are teaming up for a new American Dream Loan Fund.
"The economy is changing," said CVC President and CEO Kevin Smith. "Although we have to keep our foreclosure counselors in place, it's time we rolled up our sleeves and began helping families achieve the American Dream again. But, it can't be done the way it was done in the past. There's no room for predatory lenders and people looking to make a quick buck off of people who don't understand the home buying process," Smith warned.
Smith said the program frees up capital but places certain responsibilities on the recipients.
"They will be required to complete their budgets so they understand what they truly can afford. Each house will be inspected to insure they are investing wisely, and will not have expensive maintenance costs soon after closing. Each homeowner will receive a 3o year fixed-rate mortgage. There will be no adjustable rate mortgages or balloon mortgages that can quickly become unaffordable for lower and middle income homeowners," Smith said at a press briefing Monday.
Applicants must also have wages at 80% of the area’s median income or agree to buy homes in specific neighborhoods.
CVC says as many as 70 Kentucky families will be eligible for the new bank financing.