First-Time Buyers Given Pep Talk

The Record ( — Sunday, August 15, 2010

The Record


NEWARK — In spite of a series of unsettling economic reports, a New Jersey non-profit group delivered an encouraging message to prospective low- and moderate-income home buyers Saturday.

It might take a little longer and require more work, but people willing to make the commitment can still get low-interest mortgages and down-payment assistance to buy their first homes, about 160 women were told.

New Jersey Citizen Action targeted women, who are statistically less likely to own their own homes, at the seminar on the organization's free-loan counseling service.

"Save your money, get your credit and you'll get your house," said Melanie Casillas, who almost broke into tears as she explained how she successfully completed the program three weeks ago.

Her announcement that she bought her first home in Plainfield with a 3.75 percent interest rate elicited wows and applause at the New Jersey Institute of Technology. "You should see the features in my house ... then you'd say, 'Wow.' "

The program works because New Jersey Citizen Action, a self-described independent watchdog group, and other community groups negotiate contracts with several banks guaranteeing interest at about 1 to 1.5 percent below market rates, Executive Director Phyllis Salowe-Kaye said. She added qualifying participants can also get help with down payments and closing costs.

The banks cooperate because the federal government requires them to invest in areas where they make money from customer deposits, she said.

Scottie Ann Sawyer of Hackensack said such assistance could mean the opportunity to sleep in her own bedroom for the first time.

"I was one of five children; I've always shared a room," she said. "I'm 46, and I still don't have my own room."

Sawyer said she has wanted to buy a home since moving into her one-bedroom apartment with her then 3-year-old daughter 25 years ago. But she worried that she fell into an awkward income category. As the head of the billing department for a local company, she made enough money to disqualify her for most low-income programs, but she didn't earn enough to afford Bergen County home prices.

When issues with her landlord got her thinking about home ownership again, she was surprised to discover that she might qualify for help from New Jersey Citizen Action.

People looking to buy homes in Bergen or Passaic counties will likely qualify for assistance if their household income is less than $70,000, Salowe-Kaye said.

She added that the banks that work with New Jersey Citizen Action have shown no signs of backing out of the program, in spite of continually poor economic forecasts. A New York Federal Reserve Bank report this summer said the country's home ownership rate has dipped to 62 percent from a high of 69 percent in 2006 because of the rising rate of foreclosures.

Clients who go through the loan-counseling program are extremely unlikely to default on their mortgages, Salowe-Kaye said, because the agency keeps track of them through the life of their loans and offers additional counseling if needed.

The program, certified by the U.S. Department of Housing and Urban Development, requires participants to provide proof of income and have at least a year of good credit.

Because of the economic slowdown, it often takes clients longer to save for a down payment and to clear up serious credit problems than it did five years ago, Salowe Kaye said.

But the economic outlook can also benefit home buyers who stick with the program, she added, because home prices and interest rates are historically low.

Yani Santiago, a 33-year-old teacher's aide from Passaic, said the relatively good deals convinced her that now was the time to buy, but she couldn't afford the interest rates and fees other lenders had offered.

She said she hoped entering the New Jersey Citizen Action program would be her first step toward moving her two young children out of their crime-ridden apartment building and into a house with a back yard. "A lot of people have a dream of a white picket fence and a red door," she said. "That's what I want. I want that white picket fence."

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