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First-time homebuyers face challenges, but there’s help

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Staff Writer
Monday, February 12, 2018

With a wealth of resources available to those interested in pursuing the dream of owning a home, area residents are taking advantage of various counseling opportunities.

“People want to educate themselves more than before the housing crisis in 2008,” says Donna Cabana, homeownership coordinator for Valley Community Development Corp. in Northampton. “People are much more aware of credit and lending.”

But even with workshops and one-on-one training that educates people in becoming eligible for financing through various federal, state and local programs, there are challenges to securing properties.

“A lot of people out there want to participate, but there is a very low housing inventory,” Cabana said.

Still, Cabana said her agency is meeting with about 150 people a year for individual counseling, which is free to Hampshire County residents, and educating another 200 to 300 people in workshops annually.

Cabana said those being assisted include both home buyers who are looking to fix their credit to homeowners who want financial counseling that will help them pay for remodeling and repairs.

Fern Selesnick, the homeownership education coordinator for Valley CDC, said workshops happen monthly, except for December, at locations in Northampton, Amherst, Florence and Easthampton.

The next series begins March 7 and will be held the four subsequent Wednesdays, from 6-9 p.m. at bankESB, 241 Northampton St., Easthampton. Workshops are open to anyone, regardless of residence.

Each course has a consumer protection focus and topics related to credit and budgeting are discussed, Selesnick said. People will also hear from home-buying professionals in real estate, insurance, inspection, banking and real estate law during the sessions.

The workshops are certified by the federal Housing and Urban Development and the Citizen’s Housing and Planning Association. CHAPA certification, Selesnkick said, enables income-eligible participants to apply for special first-time homebuyer loans through participating lenders, along with first-time homebuyer grants and loans that can assist with down payments and closing costs.

Many local cities and towns are also taking actions that promote homeownership in their communities, Cabana said.

The city of Northampton, for instance, is funding $4,000 in down payment assistance, with four available per year through the Community Development Block Grant. This assistance goes to low- and moderate-income people making 80 percent of the area median income. For one person, this means earning no more than $44,800, for two people, $51,200, for three people, $57,600 and for four people, $64,000.

In Easthampton, $7,500 down payment assistance is available through Community Preservation Act funds appropriated by the city. Four of six grants, which are forgiven over a five-year period, remain for the asking in the program that started July 1.

A $50,000 mortgage subsidy is available through the CPA in Amherst, with those interested needing money for deposit. Two have already closed on properties using this money, with two remaining available.

For Easthampton and Amherst, one person’s income can’t exceed $46,620, for two people, $53,280, for three people, $59,940, and for four people, $66,600.

In addition to the communities, mortgage finance programs for low and moderate-income homebuyers also exist through the Massachusetts Housing Partnership’s ONE Mortgage and MassHousing’s products.

Elliot Schmiedl, the director of homeownership for the Massachusetts Housing Partnership, said ONE Mortgage features a low minimum down payment, a discounted interest rate, no private mortgage insurance, and in some cases additional state subsidy that helps reduce the borrower’s monthly payment.

Schmiedl said a typical first-time homebuyer education course will include presentations from a real estate professional, a lender, an attorney, a home inspector and a homebuyer educator, who walk participants through the process of buying their first home. The course should also help people identify the steps they’ll need to take to prepare themselves, if they are ready for home ownership.

Such courses, he added, are essential for many of the down payment assistance programs, including ONE Mortgage.

Cabana said talking to local officials, the competition with developers and others for properties seems to make the supply of affordable housing limited.

“First-time homebuyers are competing against cash buyers,” Cabana said.

Schmiedl said there are challenges, though they differ depending on the part of the state. The limited inventory, he said, is creating competition for affordable properties.

“These bidding wars means prices go up,” Schmiedl said. “It also means some communities are simply not available.”

Scott Merzbach can be reached at smerzbach@gazettenet.com.