WASHINGTON - The Federal Housing Finance Board has approved a rule that would help low-income families become homeowners through the Federal Home Loan Bank System's affordable-housing program.
The rule would let program subsidies be set aside as matching funds for each dollar deposited in the savings accounts of families trying to accumulate a down payment and the closing costs needed to buy a first home.
The move is part of a partnership agreement between the finance board and the Federal Home Loan Banks. The deal furthers their participation in President Clinton's program to increase the nation's homeownership rate to a record level by the year 2000.
Under the rule, the Home Loan banks could match each dollar of a family's savings with up to $3 in program funds. Each bank would be authorized to set aside annually for this purpose the greater of $1 million or 10% of its annual allocation to the homeownership program.
The set-aside of program funds required the rule change. The finance board administers the program, and the Home Loan banks can also ask the board for approval to use set-aside funds for other types of homeownership programs.
The rule change was drafted in response to a request from the Federal Home Loan Bank of New York, which plans a First Home Club to be organized through individual member banks.
The matching funds of that program will offer a financial incentive of up to $5,000 to families with household incomes 80% or less of the regional median income. Beneficiaries must be first-time homebuyers and deemed creditworthy.
The program requires that the families get homeownership training through a counseling program.
The matching-fund rule is expected to be published shortly in the Federal Register, with 30 days for comment to follow.