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CalHFA Partners with Habitat for Humanity
By Alton Gary Simpson
SACRAMENTO, CA-The California Housing Finance Agency has teamed up with Habitat for Humanity to stimulate new homeownership opportunities for more Californians. Habitat for Humanity builds affordable housing in partnership with families in need of a simple, decent place to live. Partner families work with volunteers to construct their homes, providing what Habitat for Humanity calls "sweat equity." The home is then sold to the partner family at cost with a zero-interest mortgage. Typical mortgages run from seven to 30 years. CalHFA has authorized up to $5 million of additional funding for the purchase of homeownership first mortgages originated by Habitat for Humanity affiliates in the state.
The partnership enables California Habitat for Humanity affiliates to better leverage existing resources and generate more funds, enabling them to build more affordable homes that are urgently needed throughout the state. According to the California Association of Realtors latest First-Time Buyer Housing Affordability Index, which measures the percentage of households that can afford to purchase an entry-level home in California, the percentage of households that could afford to buy an entry-level home in the state stood at 24% in the third quarter of 2007. The minimum household income needed to purchase an entry-level home with a median price of $482,910 stood at $99,590 in the Golden State, based on an adjustable interest rate of 6.56% and assuming a downpayment of 10%. This compares to a national HAI of 61%, with a minimum household income of $38,704 needed to purchase a median priced home at $187,680.
"It's no surprise that California's families are challenged to find an affordable home for purchase," said Theresa Parker, executive director, CalHFA. "And if their income is very low, it seems nearly impossible. Working together, Habitat for Humanity and CalHFA can increase homeownership opportunities. In this unique partnership, CalHFA is putting its money where it counts."
This is the third round of funding for the CalHFA Habitat for Humanity Loan Purchase Program since it was launched in December 2005. This follows two successful rounds of funding in which CalHFA committed to purchase more than $5.7 million in mortgage loans from nine local California Habitat for Humanity affiliates. The influx of capital to these California Habitat affiliates provides immediate access to funds they normally would collect over the life of the mortgages, increasing their current building production capacity. California Habitat for Humanity affiliates have until March 7, 2008 to submit an application to be considered for this round of funding. CalHFA anticipates announcing the loan purchase commitments by April 4, 2008.
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