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Program offers home loans at record low rates
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Thursday, 19 November 2009
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by Laura Adelmann
Thisweek Newspapers
Next year may be the best time in recent history for qualifying first-time home buyers to jump into the housing market in Dakota County.
County commissioners on Tuesday authorized the Community Development Agency to issue bonds that will be sold to the U.S. Treasury to raise money for low-interest home loans.
CDA Executive Director Mark Ulfers told commissioners that the New
Issue Bond Program, a federal initiative backed by the securities of
Fannie Mae and Freddie Mac, may result in local availability of 30-year
mortgage loans with fixed 4.5 percent interest rates.
Ulfers said the Treasury Department will buy up to $67 million in bonds
from the CDA, allowing it to fund first-time-homebuyer loans for
moderate-income people.
To qualify, a household of one and two people can make a total of
$83,900, and households of three or more people qualify if their income
is at or below $92,290.
Another qualifier, according to Internal Revenue Service rules, is that
the cost of a home purchased, which can be single-family, townhomes or
condominiums, must be $276,870 or less.
Funded through the Housing and Economic Recovery Act of 2008, the home
loans offered through the CDA would become available next year.
First-time homeowners could also benefit from the federal government’s
$8,000 tax credit, which is still available for people if they have a
purchase agreement written by the end of April and close by the end of
June, said Ulfers.
Dakota is the only county in the state to qualify for the program,
which will also be available in the cities of Minneapolis and St. Paul,
because it has been the only county to actively issue bonds.
“We’re the only ones who have an allocation and a track record,” Ulfers
said. “The other counties haven’t been participating in these programs
directly, and therefore, won’t be eligible to participate.”
To obtain a loan from the program, the property must be located in Dakota County.
Ulfers said the goal of the program is to support low mortgage rates,
and help low and moderate income borrowers take advantage of currently
low prices to purchase homes that have long-term affordability.
“It would really be a neat opportunity for first-time homebuyers in the
county to take advantage of some really historically low purchase
prices,” Ulfers said.
For more information about the program, go to www. dakotacda.org .
Laura Adelmann is at
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