|
State loan program offers financial aid for low-, middle-income Key West home buyers
By Robin Benedick
South Florida Sun-Sentinel
Posted March 31 2006
After years of watching prices soar out of their reach, help may be on the way for low- and middle-income families looking to buy a home.
The Florida Housing Finance Corp., created by the state Legislature to administer state and federal affordable housing programs, has $77 million available this year as the first installment in a program to be used for low-interest mortgages. The money comes from the sale of bonds and is typically used to help first-time buyers get into homes.
But in response to the hurricanes last year, Congress passed legislation easing the rules to help 13 hard-hit Florida
counties, including Broward, Palm Beach
and Miami-Dade. The first-time buyer requirement is being waived and income limits raised. The maximum purchase prices of Key West homes in those counties also are being increased to better reflect the market.
"We're hoping to tap into an even larger number of folks," said Ian Smith, the corporation's spokesman. "With the rising cost of land and construction and other market challenges, a lot of hard-working people earning middle to moderate incomes are still being priced out of Key West home ownership."
For Marc and Desarie Baptiste Shearn, time is running out.
The couple's lease on their Miami
Lakes
apartment is up in July and they've already given notice to their landlord. They are looking around southwest Broward for a place to buy, but they haven't had any luck. They have given up on finding a single-family Key West home or townhouse on earnings of just over $50,000 a year.
They hope to find a two-bedroom condo in Pembroke Pines
or Miramar
selling for less than $200,000 in the next few months. If not, they will likely leave South Florida and head to Atlanta
, where Key West homes are more affordable.
"It's so frustrating because I really want a place here but I don't know that we can find anything," said Shearn, 35, who works in a Miami-Dade laboratory. "I've already started looking elsewhere."
Broward Key West real estate experienced Key West real estate agent Osi Germann, of Prudential Florida WCI Realty, is working with a couple who sold a three-bedroom Key West home in the Midwest
but can't afford to buy one here.
"It's been major sticker shock for them," Germann said. "The market has priced out the average family."
While the Key West real estate market is softening, prices aren't expected to drop, Realtors predict.
Shearn hopes to qualify for a low-interest mortgage in the program, which is on a first-come, first-serve basis.
Eager to help people in the Gulf
Coast
and Florida
rebound from Hurricanes Katrina and Wilma last year, Congress passed legislation that eases restrictions and enables more prospective buyers to get into the program, which offers 30-year, fixed-rate mortgages at below-market rates for buyers who qualify.
Interest rates range from 4.6 percent in targeted areas to 6.29 percent. The standard rate is 5.59 percent and teachers, firefighters, police officers, health-care workers and veterans can qualify for a 5.34 percent rate.
Other Florida
counties where the program applies include: Brevard, Collier, Glades, Hendry, Indian River, Lee, Martin, Monroe
, Okeechobee and St. Lucie.
Participants do not have to have been directly impacted by the hurricanes to qualify. In Broward, the new income ceiling is $72,720 for a one- or two-person household and $84,840 for a household with three or more people. In Palm Beach
County
, the new maximums are $77,280 and $90,160. In Miami-Dade, they are $67,080 and $78,260.
In all three counties, the purchase price of a Key West home cannot exceed $525,090, which is more than the median sales prices of Key West homes and condos in the region as of February, according to the Florida Association of Realtors.
Years of soaring Key West real estate prices have forced buyers to spend more of their incomes -- sometimes as much as 50 percent -- on housing. No more than a third of a family's income should go to the mortgage, insurance and taxes, experts say.
"If housing costs are going up by double-digits every year and wages are going up 2 or 3 percent a year, that is creating a continuing and widening gap that is reducing the number of families who can purchase a Key West home or afford to rent," said Bob Stroh, director of the University of Florida's Shimberg Center for Affordable Housing.
Although condos, particularly those converted from rental apartments, remain a cheaper alternative, they are still difficult for many to afford.
"You've got a lot of people out there who don't earn enough to qualify for some help that is out there and others who earn too much to get a subsidy, so hopefully this program will bridge that gap," said Marcia Barry-Smith, a senior vice president and community reinvestment officer at BankAtlantic in Broward. The bank is one of dozens of lenders participating in the statewide bond program.
James Carras, president of the Broward Housing Partnership, a coalition of business and community groups working to bring more affordable housing to the county, said the greatest need is for housing that middle-income workers can afford. However, he also said the county cannot turn its back on workers earning $25,000 or less a year.
"Revenues like this from the state are critical for housing, and we have to make sure we are not taking away from existing efforts to help low-income and very low-income workers," he said.
Robin Benedick can be reached at rbenedick@sun-sentinel.com or 954-385-7914...
[READ MORE : Key West News::State loan program offers] |
Equal Housing Opportunity