McLEAN, Va. Rep. Edward Royce, R-Calif., and Freddie Mac have announced a $25 million initiative to help lower-income California families achieve homeownership without public subsidies.
Joining Freddie Mac are California Bank and Trust, Impact Community Capital, the California Housing Loan Insurance Fund, and the California NeighborWorks Organizations. The statewide pilot program combines a 30-year, fixed-rate first mortgage with a low-market-rate second loan that families can use to finance their down payment or closing costs.
The pilot program includes low-cost mortgage insurance, flexible underwriting, and minimal borrower contributions. In addition, the California NeighborWorks Organizations are to head up a statewide grass-roots marketing and counseling effort to bolster the program.
Families earning up to 80% of their areas median income can also get as much as $2,500 toward closing costs through a grant from California Bank and Trust. Borrowers must contribute 1% of the purchase price from their own funds toward either the down payment or closing costs.