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County may pay three-quarters of a down payment
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| | | County Executive Steve Levy with the Sanchez family of Selden. Courtesy Levy's office (click for larger version) | |
May 06, 2009 | 03:30 PM
Government has taken mortgage-crisis blame for loosening regulations on lenders in order to expand access to the American dream of home ownership.
To a similar end, a long-standing county program to make home ownership affordable on Long Island offers an arguably more fiscally responsible method. Since 1993, Suffolk has sought to stem the so-called brain drain — the departure of skilled workers who can't afford the Island's high living and property costs — through a down-payment assistance program based on federal funding.
The program has provided over 1,000 home purchasers under specific income thresholds, buying homes worth $380,000 or less, with 75 percent of the down payment, up to a limit of $14,000, according to County Executive Steve Levy. In 2008, the $1 million budgeted for the program aided 99 families, Levy said. The sum marked the largest investment in the program to date, according to Levy spokesman Mark Smith. The county apportions a roughly $3 million annual block grant among the down-payment program and other housing initiatives, like the foreclosure prevention program, Smith said.
With the down-payment aid, Kristi and Samuel Sanchez moved from a Lake Grove apartment to their own four-bedroom home in Selden last August. They had been "seriously considering moving out of state before learning of the county program," according to a Levy release.
"It was the best feeling in the world to know that I didn't have to pay rent anymore," said Kristi Sanchez, a newspaper deliverer. "I love that we have a nice big yard," she added at a Tuesday press conference at her home, while her two daughters ran about on the front lawn.
Suffolk provided $10,000 toward the Sanchez's home once a bank had qualified them for a mortgage. And that sequence is precisely how the county avoids offering starter funds to folks who can't afford the long-term costs of home ownership.
Suffolk provides the funding only after a bank determines the potential purchaser has earning power sufficient to pay off a mortgage, Levy said. Further, it must be a 30-year fixed-rate mortgage, according to county Community Development Office Director Joe Sanseverino. Adjustable rate mortgages, which have led to record numbers of foreclosures as interest rates escalated beyond the homeowners' ability or desire to pay, are excluded, he said.
Due to the Island's high land values "people making a decent income have been shut out from buying a home," Levy said. Since taking office in 2004, he has lobbied the federal government to double the maximum allowable grant for Long Island as well as to change the maximum appraised value for a qualifying home from $279,000 to $380,000 due to the region's high cost of housing, according to the Levy release.
"It needs to be just a little bit easier" to purchase a home on Long Island, said county Legislator Brian Beedenbender (D-Centereach), Ownership pays dividends for the surrounding community, Beedenbender added, as residents have vested interests in neighborhood upkeep so as to maintain their homes' values.
An additional $1 million in grants is available for 2009. Starting last week, applications will be mailed to those who have expressed interest to the county's Community Development Office. The grants are awarded on a first-come, first-served basis for individuals or families who meet the income criteria. Under the current limits, a family of four earning a combined income under $81,450 is eligible for the assistance, while the limit for a single purchaser is $57,000.
Those interested in applying for down-payment assistance may call the county Development Office at 853-5705.
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