Conventional mortgages offered by commercial banks and others now have interest rates that are so low, there isn't much of an advantage to taking out a loan under the housing fund's traditional program that is financed with bonds.
On Thursday a housing fund 30-year, fixed-rate mortgage financed with bonds carried a 3.836 annual percentage rate. Thursday's Wall Street Journal published a survey that said the average 30-year fixed rate mortgage nationwide carried a 3.64 percent interest rate, not including closing costs.
The Movin' Up Program offers mortgages with percentage rates of 3.25 or 3.625 percent.
Income and house price limits for the Movin' Up Program vary by the county where the house is located. In Kanawha County, the income limit for a family of one or two persons is $65,880. The limit for a family of three or more is $76,860. The maximum house price eligible for financing is $250,200.
Asked for an example of what a mortgage might cost using the new program, Gannon said that on a home with a sales price of $100,000, a buyer with excellent credit would qualify for the program's lowest interest rate, 3.25 percent. If the buyer made a $3,000 down payment, he or she would pay $639.70 a month. That figure includes the mortgage payment, a down payment closing cost assistance loan, hazard insurance, taxes and mortgage insurance.
Boggess said that by creating a self-sustaining program, the housing development fund can better manage its finances and still offer homebuyers an affordable home loan.
"The new program has some exciting changes," she said. "By removing the first-time homebuyer requirements mandated by the bond program, we can better serve moderate income buyers."
David Rathbun, the housing fund's senior director of single-family loan origination, said in a prepared statement that the housing fund will continue working with its statewide network of lending partners. Loans made under the new program will be serviced at the housing fund's Kanawha City office.
The housing fund also uses self-sustaining programs to finance its down payment and closing cost assistance loans. Gannon said the fund also has previously made some loans to customers who were not first-time homebuyers.
Contact writer George Hohmann at busin...@dailymail.com or 304-348-4836.