Fixing foreclosures: Loans would combine purchase, repair costs

Couple with contractor in structure (Jupiterimages)

A mortgage program designed to reduce the glut of foreclosed properties and spur home sales will be rolled out next week, officials said Friday.

Called "Get Home Now!" the program will include loans for more than the property is worth, with buyers able to use the extra cash to spruce up the home before moving in.

The loans can be used to purchase a home or refinance a current mortgage.

A down payment of 3.5 percent is required, along with other qualifying standards.

"We're not just offering a mortgage loan. We're offering new homeowners the ability to buy ... properties and then turn them into the home of their dreams," said Andrew Peters, vice president at First Guarantee Mortgage Corp., one of the participants in the program.

Home Depot, APD Solutions and lender Ginger Mae Financial Services are also listed as participants.

Officials of First Guarantee, APD, Home Depot and the real estate industry will discuss the program during a meeting at 8 a.m. Tuesday at the Pacoima Neighborhood City Hall at 13520 Van Nuys Blvd.

This could boost sales in the San Fernando Valley, which just saw its worst-ever May and is on track to set a full-year record low.

Jim Link, chief executive officer at the Van Nuys-based Southland Regional Association of Realtors,

said the program could have two big local impacts.

"It's going to help move some of that (distressed) product that quite honestly is in dire need of repair and it will help first-time buyers," he said.

While it might be possible for a first-time buyer to scrape up a 3.5 percent downpayment, they typically don't have the money to fix the house up right away, he said.

Peters said that the lenders are using federal Housing and Urban Development Department renovation loans in the program.

After a buyer finds a property and qualifies for a loan, they will contact a Home Depot, whose renovations department will assess what repairs need to be made and help the buyer find a contractor.

The contractor will be paid out of an escrow account.

Buyers with a credit score of 580 or lower can qualify but applicants will be thoroughly vetted, Peters said.

"We don't approve everybody. We underwrite the old-school way. We looks at their assets, their job history and and their current housing payment rather than just their credit score," he said.

For more information, see www.apdsolutions.com.

Source: http://www.dailynews.com/news/ci_18303823?source=rss

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