Real Estate experts have said for months that it's a buyers market, and, with the help of the Tennessee Housing Development Agency, the favorable housing market is open to more buyers. (File photo)
Mortgage brokers, Realtors and real estate experts have been saying this for months now, what with mortgage rates so low and home sales on the rise.
While owning can oftentimes be cheaper than renting, the purchase ultimately depends on a down payment and financing. That's where Tennessee Housing Development Agency can come into play.
THDA is the state's housing finance agency, responsible for selling tax exempt mortgage revenue bonds to offer affordable mortgage funds to homebuyers of low and moderate incomes through local lenders, and to administer various housing programs targeted to households of very low-, low- and moderate-incomes. The agency offers 30-year, fixed rate mortgages and down payment assistance for first-time homebuyers.
A favorable market for its latest bond issuance has allowed THDA to reduce the interest rates on its mortgage loan products, the agency announced recently.
"We are pleased to be able to offer these reduced interest rates," said Lindsay Hall, THDA's Senior Director for Single Family Programs. "This is great timing; summer is historically a prime time to buy a home. The inventory of existing homes is high. If a buyer chooses new construction we offer a six-month interest rate lock. We invite potential buyers to contact their lender or real estate professional."
THDA offers three mortgage loans -- Great Rate, Great Advantage and Great Start. The lowest interest rate, 3.6 percent, is the new rate for the Great Rate mortgage. The Great Advantage and Great Start mortgage loans offer good interest rates and downpayment assistance grants.
Buyers who choose a 4 percent downpayment grant under the Great Start mortgage will pay a fixed rate of 4.2 percent on the 30-year loan. Great Advantage customers, those who accept a grant of 2 percent of the purchase price towards their downpayment, have an interest rate of 3.9 percent.
These interest rates were lowered from 3.95 percent Great Rate, 4.25 percent Great Advantage and 4.55 percent.
Additionally, Veterans are invited to apply for a program designed for them. The Homeownership for the Brave program, available through March 30, 2013, takes .5 percent off any of the three interest rates. Veterans, or spouses, would apply for a 3.1 percent Great Rate mortgage, a 3.4 percent Great Advantage mortgage or a 3.7 percent Great Start mortgage.
Buyers are encouraged to take a pre-purchase homeownership class. Those who accept a downpayment grant are required to take a class not more than 12 months before the purchase.
"We have research that shows a remarkably higher success rate for buyers who have taken homeownership counseling," Hall said. "There are counselors available across Tennessee. They are listed on our website."
The production of mortgages at THDA has been steady throughout the economic instability. Nearly $25 million in mortgage applications were received in June, according to the agency.
Home sale prices experienced a substantial decline over the past several years, and while that is not a good thing, it does mean good news for homebuyers: affordability. A median-priced home is affordable to a median-income family in Tennessee, according to a 2011 THDA report, "Tennessee Housing Market at a Glance."
Affordable homes coupled with THDA payment assistance means good news for Tennessee communities.
"A safe, sound affordable home supports family and individual health, economic employment success, educational achievement and contributes to the sustainability of the neighborhood and community," THDA announced in its 2011 report of the agency's economic impact.
"In addition to benefiting individuals and families, THDA programs create additional jobs, income and spending in the local economy and add to state and local revenues."
Real estate experts explained the benefits of homeownership during Greater Nashville Association of Realtors' inaugural housing summit.
From the family level, in addition to purely providing shelter, the stability impacts everything from how children perform in school to how people engage in their community. Building equity helps build security for the owners and their family.
Trends show homeowners as the most active voters and volunteers for charitable, faith-based and civic organizations, among others.
"Reading national news can create a false impression of what is truly the situation right here. In the spirit of 'all politics being local,' so is all real estate. We are convinced we can make a difference in Greater Nashville by helping people understand that there are resources, professionals and opportunities here that change the landscape dramatically," said Ted Fellman, executive director of THDA, during the summit.
The agency offers many housing programs that address the needs of renters and homebuyers through mortgages, new construction and rehab grants and tax credits, and a host of other programs
For information about THDA loans and down payment assistance, visit www.thda.org or call 615-815-2200.