Making home ownership more accessible

Homeownership is now becoming more accessible to first-time buyers in Tennessee — Clinton included.

Low to middle-income potential homebuyers looking to purchase a home in Clinton now have a greater chance of affording a home purchase thanks to the efforts of a state housing assistance agency with $60 million in federal funds to cover the assistance.

On March 1, the Tennessee Housing Development Agency (THDA) expanded its Great Choice Home Loan program to include offering up to $15,000 in down payment and closing cost assistance for would-be homeowners buying in zip code 37716 — which includes all of Clinton — in Anderson County.

In Clinton, “modest and low-income homebuyers” means one-and two-person households earning up to $61,900, and larger households earning up to $71,185.

“Tennessee is the first state to be able to target neighborhoods at the zip code level. Out of 55 zip codes statewide, Clinton was one of the zip codes targeted,” said Ralph Perrey, THDA Executive Director in an interview on Thursday.

“We’re targeting the areas that have been slower to recover from the recent economic downturn, and we’re hoping this will provide an incentive for potential homebuyers to buy a home in Clinton,” Perrey said.

Foreclosures, negative equity rates, and short sales were some of the “stress” factors federal and state officials considered in determining which Zip codes would qualify for the program.

The program is being funded by the United States Department of the Treasury’s Hardest Hit Fund, a program created in 2010 to help Americans who were struggling to pay home mortgages in the aftermath of the economic downturn.

“Eligible borrowers who purchase homes in Clinton using THDA’s Great Choice Home Loan program can apply for $15,000 in Hard Hit Fund assistance towards their down payment and closing costs in the form of a second mortgage loan forgivable at the end of 10 years,” Perrey said.

The loan does not accrue interest, homeowners make no monthly payment during its 10-year term, and better yet, THDA will forgive 20 percent of the loan each year, starting in year six, he said.

“The loan will be completely forgiven if the homeowner does not opt to refinance, move out, or sell their home by year 10,” said Perry, “that means after 10 years without reselling or refinancing, the loan is completely forgiven.”

Anderson County Commissioner Rick Meredith who represents district 2 in Clinton says this program is extremely beneficial to potential homebuyers who are looking to make their home in Clinton.

“With the growing demand for affordable housing, the Tennessee Housing Development Agency’s program will enhance and improve the housing situation in Clinton by providing the necessary down payment for first-time home buyers who otherwise could not make the dream of owning a home a reality,” said Meredith in an email on Monday.

Robert McKamey, Anderson County Commissioner for dist. 5, said although he was not “very familiar with this program since it is relatively new,” he is certain “the idea of down payment assistance will help people who are actively looking to purchase a home in the Clinton area.”

“The problem in the Clinton area is the lack of affordable housing and this problem does not address that,” McKamey added.

The first-time homebuyer requirement is waived for military personnel (active duty, retired or reserve), and repeat homebuyers can still participate if they meet any of the following qualifications: have not lived in a home you own for at least three years; buying in one of the 58 targeted counties; buying in a designated neighborhood in 14 additional counties; and participating in the Homeownership for the Brave program for qualified active duty military households and U.S. veterans.

If any of these situations applies, THDA will waive the requirements for a repeat homebuyer to be a first-time homebuyer, meaning the repeat homebuyer who meets these qualifications would then be eligible for a Great Choice Home Loan with down payment assistance like a first-time homebuyer.

Homebuyers living outside the covered zip codes can still apply, but payment assistance is limited to five percent, Perrey said.

In addition to meeting THDA’s income requirements, eligible homebuyers who have been approved for the program are required to participate in and complete an eight-hour course on homeowner education to prepare them for home ownership. The homebuyer education requirements consist of pre-purchase and post-purchase education--usually combined into a ‘combo’ class--prior to the homebuyer closing the loan. Homebuyers can meet the education requirement by completing the class online or by attending an in-person class through an approved HHF-DPA counseling agency.

The average home value in Anderson County is roughly $128, 700, according to Anderson County Property Assessor John Alley.

“There are many factors that involve obtaining the median home value and depending on which of those factors are included in the search affects the over all value,” said Alley.

The median home value includes condos, townhouses, single unit homes and mobile homes--no multi-dwelling units, farms, or vacant lands were included in the search, said Alley.

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