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The low-income home loan is intended for individuals earning
less than 80% of the average American take-home pay. They
belong to the most deprived sectors of society and that
is why a good number of government agencies as well as private
sector groups are working hand in hand to meet the housing
needs of this sector.
A number of housing schemes are available in the market
that provides decent housing programs for new homeowners;
a self-help housing programs for able-bodied homeowners;
home repair and preservation programs to arrest housing
degradation; and still other programs that vary from state
to state.
Of interest is the low-income home loan provided by the
Housing and Community Facilities Program (HCFP). It is a
single-family housing program that transfers home ownership
to low and moderate American sectors through loans, grants
and related guarantee programs. Services also cover funding
to finance vital improvements and repairs to render these
homes decent, safe and sanitary. Some of the more accessible
programs are mentioned as follows:
The direct low-income home loan program helps individuals
or families through direct financial assistance from the
HCFP at affordable interest rates. This form of assistance
targets interested individuals who will not qualify under
traditional home loans.
Through this program, HCFP aims to extend financial assistance
to more people, not just for the benefit of newly-constructed
house but also for individuals who would want to purchase
an existing house and lot. The HCFP hopes that this program
will resolve part of the country's severe housing problem
affecting this sector of the society.
To sustain the viability of the HCFP low-income loan program
guarantees are extended to loans offered by private lending
institutions, declaring that "a loan guarantee through
HCFP means that, should the individual borrower default
on the loan, HCFP will pay the private financier for the
loan". The provision is clear that regardless of how
much amount is extended for a loan, HCFP will cover payment
in case of default.
Also under the terms of the program, an individual or family
can avail of up to 100% of the appraised value of the property
without the need of a downpayment. HCFP knows that the main
stumbling block to homeowner's access to affordable homes
is the lack of funds to pay for an initial downpayment;
a reality that is endemic to a much larger segment of the
American populace.
Of equal importance and a low-income home loan strategy
is the mutual self-help housing program. This program enables
future homeowners to work on the construction of the house
themselves- a form of "sweat equity" so to speak,
which in the process reduces the construction cost of each
house.
Qualified applicants are encouraged to complete at least
65% of the work expended in building a house. Technical
Assistance Grants and Site Loans are also extended to nonprofit
local government organizations, with groups of 5 to 12 members
working on each other's home, where homeowners moving in
only upon completion.
For low-income families who have decently acquired their
own homes, the HCFP offers the home repair loan and
grant programs for renovation of existing facilities.
Funds can also be provided to repair a leaking roof,
to provide for a central heating system or a front
door ramp for the disabled using a wheelchair and
a lot more to make low-income earners cope with the
harsh realities in life.
Fiction: The proper way to overcome the barriers
of a low income home loan is to make a higher income,
duh! I said, duh. Like you really didn't know that
already. So, what are you waiting for? Don't screw
around with trying to get a low income home loan when
the solution is to make a higher income. Get to work.
Start your own website selling blue widgets. In a
matter of weeks you'll be a gazillionaire and can
take out a high income home loan.
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