Home-Buyer Assistance Is Still Available

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Odd as it might sound, desipite the housing bubble, there's still some help out there for first-time buyers. This despite the fact that the California Association of Realtors says that, as of Nov. 2005, only 11 percent of households in Los Angeles could afford to purchase a median-priced home.

That's a record low.

I keep waiting for some wise newspaper with a bigger budget than mine to look into how many of these programs are actually placing people in houses, or condominiums. With prices as high as they are, it's hard to imagine that down-payment assistance makes any difference when the monthly mortgage payment will end up consuming most of the buyer's monthly income. Of all the things goverment can do to help people afford housing, flat-out buying it for them is probably not the best solution.

I seriously doubt that down-payment assisstance will do any good as long as the housing bubble remains inflated. Don't forget, Mortgage payments already exceed half the household income for 25 percent of LA homeowners, according to a recent analysis conducted by the Christian Science Monitor.

Then there's the other reality — first-time buyer assistance programs exist to help only people with low incomes. This fact is a source of heartburn for those who earn a middle class salary, but still can't afford to own a home. It is an indisputable fact that in order to purchase the "mythical" median-priced $550,000California home the annual household income would have to exceed $130,000. That assumes a mortgage rate of 6 1/4 percent (better act soon) and a downpayment of 20 percent.

I realize it's not unheard of for goverment to give money to people with six-figure incomes, but usually it's a political payback in the form of a heavily padded government contract. What you don't hear much about is the issuance of first-time homebuyer assistance to people with six-figure incomes. Can you picture it in the current political climate? If you can, pass me some of whatever you're smoking when you're through.

Nonetheless, some people are still dedicated to fixing what's wrong. There's the proposal to help LA law enforcement, among others.

If you think you might qualify for something, check with your local city hall, or a mortgage broker, about what programs might be available through city and county governments. Meanwhile, the California Department of Real Estate says that CalHFA, the California Housing Finance Agency, also has several home-buyer assistance programs for first timers, including down-payment and closing-cost assistance, programs for teachers, and grants "for buyers of newly constructed homes." The DRE says more info is available at CalHFA or by calling toll-free 1-877-9CALHFA (877-922-5432).

In case you've never heard of CalHFA, their mission is to support "the needs of renters and first-time homebuyers by providing financing and programs that create safe, decent and affordable housing opportunities for individuals within specified income ranges."

-- The Boy in the Big Housing Bubble/Los Angeles and Beyond