The Utah Housing Finance Agency is starting a Comprehensive Housing Assistance Mortgage Program that executive director William H. Erickson calls "an innovative new home ownership opportunity for very low-income households of Utah."
CHAMP is designed to offer each qualifying buyer a comprehensive package of assistance that not only allows the homebuyer to get into a home, but also assists them in maintaining and keeping their home, he said.About 110 households with very low incomes (less than 50 percent of the median income) will have their first opportunity to purchase a quality and affordable home through this program, Erickson said.
CHAMP is supported by a broad-based coalition of public and private organizations that collectively have made $5.7 million available to support the program. UHFA is supplying $5.2 million in mortgage funds; $300,000 comes from subsidies provided by the Federal Home Loan Bank of Seattle; $180,000 from six Federal Home Loan Bank members in Utah; and there is a $10,000 grant from the Utah Department of Community and Economic Development.
Erickson said the program is entirely self-funding and won't cost taxpayers a cent. Also, there are diversified forms of assistance offered to qualified homebuyers under this program to ensure their successful transition to homebuying, he said.
CHAMP's special features include deeply discounted mortgage interest rates that begin at 7.06 percent in the first year and increase gradually until 8.06 percent in the fifth year. After paying the $500 down payment and closing costs, each qualified applicant will get up to $1,500 in cash for application on the remaining down payment and closing cost balances.
The people also will receive reduced origination and servicing fees from the eligible participating lending institutions. They will have access to special emergency home repair funds administered by UHFA, this portion to be funded at $100,000.
A one-time loan of up to $2,500 may be obtained during the first five years of the mortgage as long as buyers remain in the low-income group, need assistance and demonstrate an emergency repair need. Emergency home repair loans will have a 3 percent interest rate and must be repaid over five years.
Money from the repaid loans will be recirculated and used to promote additional low-income housing assistance, Erickson said.
Another feature of CHAMP allows prospective home buyers to obtain at no cost a one-year home buyer's warranty plan that will give protection against the need to repair or replace major appliances and heating, plumbing and electrical systems.
The program also includes financial counseling and homeowner education for each household to prepare people for owning a home.
In Salt Lake, Davis and Weber counties, the CHAMP program is targeting household incomes of between $17,850 and $20,500, depending on family size. In all other counties the income limits are between $16,650 and $19,100. The price of the houses that can be purchased range from $41,000 to $52,500, depending on location and family size.
More information can be obtained by calling UHFA at 521-6950. Applications are available at mortgage lenders FirstFed America Bank; Zions Mortgage Co.; First Federal Savings Bank; Ogden First Federal Savings and Loan; Olympus Bank; and United Savings Bank.