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February 15, 2002
New Financing Options for Prospective Low Income Homeowners
Miami-Dade Neighborhood Housing Services (MDNHS) announces new lending activity
to increase homeownership in Miami-Dade County for families with limited incomes.
MDNHS has developed a Fund of $4 million for the First Mortgage Product targeted
to first time homebuyers, but the Fund is available to prospective homebuyer. HSBC
Bank USA and Bank Atlantic have each committed $2 million for MDNHS to make first
mortgage loans. Both lenders have pledged that their amount is renewable, so the
$4 million will continue to revolve and produce more homeowners.
Prospective borrowers will come to MDNHS to complete the required Home Buyers Education.
MDNHS will take their loan application, assemble the needed verifications and documents,
and originate a first mortgage.
The completed loan application package will be sent to MDNHS NeighborWorks Network
secondary market partner in Oakland, CA, Neighborhood Housing Services of America
(NHSA), who underwrite the loan. When they have given their approval, NHSA will
send the loan package on to one of the two local lenders, HSBC or Bank Atlantic.
The local lending partner will fund and close the loan. The local lender will sell
the loan to NHSA and recover its investment in order to do more lending.
Currently, the interest rate for families with incomes under 80% of area median
income is 6.5% and for families with incomes over 80% the rate is 7.0%. Families
need to have steady work histories and clean or repaired credit. MDNHS will assist
families to become mortgage ready through their training and counseling activities.
With an average first mortgage amount of $55,000, MDNHS will create about 75 new
homeowners with the first $4 million.
MDNHS First Mortgage Product is a win-win situation for everyone. The prospective
borrower becomes a homeowner maybe when they started out thinking they couldn t;
the local lender uses their expertise and financial investment; MDNHS fulfills its
mission of creating homeowners; and Miami-Dade County gets another homeowner.
This First Mortgage Product is not only available to families who come to Miami-Dade
Neighborhood Housing Services. MDNHS is in conversation with several other community
development corporations about the possibility that they will send some of their
families to MDNHS to use this mortgage option.
Because of the high cost of housing in the county, many of these loan customers
will need additional resources in order to make their home purchase feasible. Often
MDNHS refers prospective borrowers to Miami-Dade Housing Agency and their second
mortgage program to close the gap in financing for borrowers.
The First Mortgage Product is not only available to families who come to MDNHS to
buy a home. MDNHS is in conversation with several other community development corporations
about the possibility that they will send some of their families to MDNHS to use
this mortgage option.
MDNHS believes that homeownership is critical for stable neighborhoods and healthy
families. While all of the activities at Miami-Dade Neighborhood Housing Services
contribute to increased homeownership, stable neighborhoods, and healthy families,
MDNHS is especially pleased to make this announcement regarding a new financial
option for prospective borrowers. The First Mortgage Product and the revolving $4
million made available by HSBC and Bank Atlantic will get more families into homeownership.
MDNHS is not-for-profit organization whose mission is to promote neighborhood revitalization
and affordable housing services to low- and moderate-income residents of Miami-Dade