Down-payment assistance loans
Two hundred low-income families each will receive a $10,500 downpayment assistance loan to help them with home purchases thanks to a $2.1 million grant awarded to Appalachian Community Federal Credit Union (ACFCU). Potential buyers, realtors and others needing further information about program participation should contact Curtis Montgomery, ACFCU’s Partner Support Coordinator, at (800) 378-3778, (423) 230-2648 or email@example.com. ACFCU will partner with multiple housing-related organizations across Clay and 29 other counties in Kentucky, Virginia and Tennessee, and plans to complete the program over two years starting this month.
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“Homeownership is one of the most effective paths to building wealth and financial security, and for many low and moderate-income families it is the only path,” ACFCU CEO Ron Scott said. “ACFCU provides members with tools to manage their finances and improve their credit scores. We provide a variety of fair lending options. But many deserving families still cannot muster the initial resources required for homeownership, so we’re grateful for this opportunity to help radically change peoples’ lives for the better.”
ACFCU was one of fewer than 20 recipients in a highly competitive national grant process for the “Project Reinvest” program. The credit union is a federally certified Community Development Financial Institution (CDFI), a status reserved for financial institutions dedicated to responsible, affordable lending to help low-income, low-wealth and other disadvantaged people and communities join the economic mainstream.
Adam Dickson, ACFCU’s CDFI resource coordinator, said the grant allows ACFCU to enter a new chapter in its work as a CDFI, and to strengthen regional partnerships.
“We greatly respect the region’s community development sector and their focus on affordable housing,” Dickson said. “Being a CDFI, we want to leverage our designation to be of the greatest impact for the needs of Central Appalachia. Using this funding together with partners to change families’ lives for the better is one way we see ourselves as good stewards and effective collaborators.”
Families with incomes at or below the area annual median may qualify for the program. For a family of four, that equates to $46,375 in most of the rural counties ACFCU serves, including 16 in Southeastern Kentucky.
In that income range, with good credit and not too much other debt, a family could afford to borrow up to $140,000 using very conservative estimates. At a family income of $36,000, the amount is still about $110,000.
Yet many families in these income ranges still struggle to become homeowners, according to Tom Manning-Beavin, Director of Housing for Kentucky Highlands Investment Corp. (KHIC), which is one of ACFCU’s primary partners in the effort.
“This resource has the potential to put homeownership within reach of many more families in Southeastern Kentucky,” said Manning-Beavin. In addition to helping bring jobs to Southeastern Kentucky, KHIC helps low and moderate-income families achieve homeownership across 22 counties. Manning-Beavin said that many credit-ready households struggle to accumulate extra savings for a downpayment and closing costs. This barrier, along with limited affordable housing stock, makes owning a decent home beyond the reach of many families who otherwise qualify for homeownership finance.
“Many of those families are fully capable of successful homeownership,” Manning-Beavin said. “Many families pay as much in utility bills and rent as they would for a mortgage and utility costs on an energy-efficient home, so we know people can make the mortgage payment for 30 years. They can do that. It’s about upfront money.”
Other families’ income levels leave them with a very small number of homes they can afford – and even fewer that are of good quality. They often can’t access the types of loans that would allow them to buy and renovate a house that is affordable.
“Without some kind of extra help, it can be pretty difficult for many of our homebuyers to find a new home that will meet their needs, with financing they can afford,” Manning-Beavin said. “We’re hopeful Project Reinvest will also open up opportunities for people in these situations.”
All families who receive the loans – which are payable only if the owner sells or refinances the home – will have completed eight hours of homeownership training.
“Project Reinvest isn’t just about getting families into their own homes,” Scott said. “We want the families who benefit to be prepared for the various ‘bumps in the road’ that homeownership entails.”
ACFCU will work with a variety of realtors, lenders, non-profits and others to find potentially eligible families and help them achieve the American Dream. It is a dream that continues to elude the grasp of many families with adequate income who lack the upfront resources necessary to buy a home, Manning-Beavin said. “We know that hundreds of families in Southeastern Kentucky are credit-ready and have the income to be homeowners, and the Project Reinvest funds will be the final piece of the puzzle for many of the homebuyers we serve.
“This really could be the difference between turning families away and being able to tell them, ‘with this extra resource we can get you into a home,’” Manning-Beavin said.
See the income eligibility sheet below…