Pr. William Board Wants To Help Provide Loans
Wednesday, November 19, 2008
Prince William lawmakers supported a plan yesterday aimed at providing more affordable housing for county employees in an effort to stem the foreclosure crisis.
The Board of County Supervisors agreed in principle to make loans available to county employees, many of whom drive long distances to work because they cannot afford to buy homes in Prince William.
Supervisors also considered whether to spend $4 million from the U.S. Department of Housing and Urban Development to redevelop abandoned, blighted or foreclosed homes. The money is part of the nationwide $3.92 billion housing bill Congress passed this summer. It will deliver $22 million to the Washington region's hard-hit localities.
Prince William has the highest number of foreclosures of any jurisdiction in the state. The plan to provide homeowner assistance to county employees is the latest effort by a local government in the area to increase the number of affordable homes. Last summer, Fairfax County approved a program to buy foreclosed properties and sell them at below-market prices to working families.
Under Prince William's program, the county government would invest as much as $50 million in pass-through certificates of deposit at SunTrust bank. The proceeds would be used to offer mortgages to the county workforce, about 3,500. Entry-level employees, who are paid about $44,000 a year, are the target group.
To be eligible, employees must live outside Prince William or rent in the county. The potential home must be an existing residence, not new construction, with a maximum purchase price of $300,000.
Loans would be made available through the Federal Housing Administration, which allows down payments of as little as 3.5 percent. Borrowers can use the money to reduce the interest rate for the life of the loan or for closing costs.
In surveys this year, almost half of county employees indicated that they were interested in the program.
For years, firefighters, police officers and teachers have had the most trouble finding affordable homes in Prince William.
Officials hope that the program can help almost 200 employees and their families move into the county every year. Supervisors are scheduled to give final authorization next month, and officials hope to start the program in January.
"The goal is to decrease home inventory in the county 5 percent each year. We are leveraging $50 million a year to do that," Finance Director Christopher E. Martino said. "As far as we know, that is significantly more than what we see other jurisdictions putting out there."
The county formed a task force in fall 2007 to come up with ways to reduce the glut of homes on the market, help stabilize home prices and increase the county's tax base. Because the county has no money to spend on housing incentives and cannot directly offer real estate loans, the task force came up with what it called the "Home Help" program.