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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.
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