Mortgage money available for poor working families

Thursday, Aug. 23, 2001 | 11:20 a.m.

For information about Fannie Mae's affordable mortgage plans or a list of participating lenders, call Fannie Mae's Consumer Resource Center at 1-800-7FANNIE(1-800-732-6643) Monday through Friday, 6 a.m.-2 p.m.

A new finance program will pump $200 million into Nevada to help poor working families purchase existing and new homes.

Hundreds of low- and moderate-income families -- including single working mothers, immigrants and minorities -- will be eligible for money from the largest program of its type in the state's history.

The program is being offered by CitiMortgage Inc. and Fannie Mae. CitiMortgage will originate -- and Fannie Mae will purchase -- $200 million in affordable mortgage loans.

CitiMortgage, a member of Citigroup, is among the top 10 mortgage originators nationwide. Citigroup is a major financial services company that has among its brand names CitiBank, CitiFinancial, Primerica, Solomon Smith Barney and Travelers insurance company. Fannie Mae is the largest non-bank financial services company in the world, and it operates under a federal charter to assist qualified families.

This is not a government program or a grant for which the state or any agency applied, but rather "a good business decision to make it possible for the underserved to buy homes," Fannie Mae spokeswoman Colleen Haggerty said.

"CitiMortgage and Fannie Mae already have a strong presence in Nevada. Clark County, with its home ownership rates soaring, is a great market to tap. We believe anyone who has a job and wants to buy a home should be able to do it."

Sen. Harry Reid, D-Nev., who worked with the companies to make Nevada part of the nationwide $12 billion initiative, agreed.

"This program will address social concerns by making it possible for working poor people to qualify for down payments for homes -- money that in many cases they just can't otherwise raise," Reid said.

"As housing prices continue to increase with demand in Nevada, there is a growing need to increase affordable lending to help ensure that hard-working families are not priced out of the housing market," he said. "This program will help make the American dream a reality in Nevada."

The funds will be doled out to Nevada over the next five years and, according to Charlene Peterson, director of Nevada partnership for Fannie Mae, this is only the start.

"The $200 million is not a ceiling, it's a floor," she said, noting that as it becomes necessary, more money would be put into the program. "In Las Vegas, the average monthly rent is about $700. Today, a home mortgage can be $700. The down payment often is the only thing standing in the way of home ownership.

"Home ownership increases a family's wealth, because one of the single most important assets people can have is equity in their homes."

Wilbur A. McKesson Jr., national sales director of emerging markets for CitiMortgage Inc., said Nevada's "tremendous growth" makes it a good candidate for this program.

"There is a home ownership gap for minorities, and we will try to close it," he said. "This program will reach deeper into the community and target those who want to be homeowners but cannot under current situations."

To qualify, a Clark County household cannot earn more than $52,100 a year; a Washoe County household cannot earn more than $58,400, Peterson said.

In a news release, Felix DeHerrera, president of the Las Vegas Chapter of the National Association of Hispanic Real Estate Professionals, said the program will enable local real estate agents "to help more clients build a strong foundation of homeownership that generates wealth, strengthens families and increases overall quality of life."

McKesson said the $12 billion national initiative will be structured to help borrowers who have little money saved. It will be possible, he said, for potential buyers to pay their mortgages and have enough money left over for minor repairs and renovations, such as new carpeting and paint.

He cautioned, however, that the program is not designed to assist with the purchase of homes that require major renovations or the construction of extra rooms.

The interest rates for the program will be competitive, Peterson said, noting that the market rate in Southern Nevada is about 7 percent for a 30-year fixed rate mortgage.