As Gulf Coast recovery grinds on, another ray of hope came recently from a local-federal government plan for new below market rate purchase and repair mortgages, loan cost assistance and special home loans for crucial community workers.
Freddie Mac is buying $36 million of Louisiana Housing Finance Agency's (LHFA) tax-exempt mortgage revenue bonds to help finance low cost home loans and LHFA is providing more than $1 million of its funds for down payment assistance.
The new initiative will provide an estimated 300 borrowers with 5.35 percent or lower 30-year fixed rate mortgages that can be used to repair existing homes or purchase new ones.
The extra $1 million will be used to subsidize special mortgages for police, teachers and low-income borrowers who may be able to qualify for 30-year fixed rate mortgages with rates as low as 3.85 percent.
That's a welcomed drop in the bucket for the hundreds of thousands of residents displaced last year, largely by Hurricane Katrina, but also by other storms.
The Bring New Orleans Back Commission rolled out a land-use plan for the city in January, but the process to help 80 neighborhoods rebuild stalled over procedural disagreements and insufficient funds for the initial planning stage.
Grass-roots community efforts to take control of their future have sprung up all over Crescent City, led by residents who fear losing entire neighborhoods to the wrecking ball.
LHFA is giving special priority to federally designated disaster areas in order to add momentum to the state's storm recovery efforts and historically under served parishes targeted for urban revitalization.
The mortgages, are available on a first-come, first-serve basis through a list of participating lenders found on LHFA's website.
To help more borrowers caught in the 2005 storms, LHFA is waiving its usual first-time home buyer requirement and raising its cap on home repair loans from $15,000 to $150,000 under special provisions in the Katrina Emergency Tax Relief Act of 2005. To be eligible for the new mortgages, borrowers can earn no more than 140 percent of their area median income.
In the Gulf Coast rebuilding effort Freddie Mac also financed $120 million in Mississippi Home Corporation (MHC) bonds, provided MHC with $900,000 to buy 35 travel trailer units for use as temporary housing for displaced families and more than $1 million for rental units and credit counseling to storm victims.
Freddie Mac also adopted emergency policies that temporarily suspended mortgage collections from many single and multifamily borrowers affected by the storm, assured forbearance for National Guard members involved in recovery operations, financed as much as $300 million in pre-storm loans closed on homes in federally-designated disaster areas, and joined with the Freddie Mac Foundation to donate $10 million to hurricane relief organizations.
