Originally created 07/06/97

Program helps young couples



Instead of toasters and comforters, would-be brides and grooms can ask friends and family for money to help them buy a house.

That's just one of the ways home-buying has changed for couples over the years. Financial institutions, working with federal and state government programs, have several options for twosomes.

The bridal registry, adopted by the Federal Housing Authority last year, is an interest-bearing savings account. It allows cash gifts to be used as acceptable funding for the down payment or closing costs of a home. The money in the account can be withdrawn at any time.

Augustans haven't quite caught onto the bridal registry program yet, according to local lenders and real estate agents.

"Real estate agents haven't been marketing and talking about the program much, probably because they don't know about it," said Sandra Glosser, a loan officer with SouthTrust Bank. "But there are many programs out there. People are able to get into nice houses with not that much more than $2,000 down."

Until bridal registries pick up in popularity, near-newlyweds as well as couples already married have other options they should check into, said a representative of Fannie Mae, the nation's largest source of home mortgages.

For the past five years, Fannie Mae (formerly the Federal National Mortgage Association) has conducted a national survey garnering people's attitudes toward homeownership. The surveys determine what obstacles stand in the way of people purchasing a home, said Tim Carlsgaard, a spokesman for Fannie Mae.

The results that were released last month reveal 44 percent of those surveyed feel they can't afford the down payment or the closing costs of a home, compared with 52 percent in 1996.

"This trend fits in with the attitude of people in Augusta and all over the country who don't realize they can get into a home with as little as 3 percent down," said Mr. Carlsgaard. "Three percent down was unheard of even five years ago."

Besides the 3-percent down payment, Fannie Mae offers a new pilot program called Flexible '97. It is being tested in three metropolitan areas, including Atlanta.

With Flexible '97, the 3-percent down payment can take the form of a gift from someone or couples can charge the full amount to a credit card, said Mr. Carlsgaard.

"Another thing that's out there is low interest mortgage loans. This is also done through your local or state housing agencies. You can find below market loans - these are often called mortgage revenue bonds and allow local housing agencies to offer low interest loans," he said. "Young couples should look for programs designed for first-time home-buyers. Many cities and counties offer down payment assistance programs. They'll provide grant money to help you with a down payment that often doesn't have to be repaid.

"Anywhere from $3,000 to $15,000 is available to help with closing costs and down payments. There are a lot of places just sitting on this money because no one is asking about these programs. But if you don't ask the questions, you'll never find out about them."

The best thing new home-buyers can do for themselves is to call city and county housing agencies, said Mr. Carlsgaard. These agencies know of organizations that offer grants and other moneys to people who need help with down payments or closing costs on a home.

The agencies also have mortgage revenue bonds that allow them to offer loans at lower interest rates than traditional lenders.

Many local first-time-buyer bank programs are based on income, but like federal programs, require little or no money and have lenient credit terms. The programs also are more lenient when it comes to debt ratios - the amount of money a household is paying out on bills such as car and credit card loans.

SouthTrust Bank's Right Start Program has no minimum loan amount, the seller can pay up to 6 percent in closing and prepaid insurance costs, and no mortgage insurance is required, said Ms. Glosser. Under this program, which was implemented this past January, couples can qualify for more house with less money, she said.

"Right Start can get someone into a home for as little as $2,250 down and $616.81 a month for a house that lists for $75,000," said Ms. Glosser. "But in order to qualify for the Right Start program, couples can only bring in a combined income of $41,600 annually."

Wachovia Bank offers two programs. In fact, one is tailormade for medical students at the Medical College of Georgia. Under the Medical Professional Program, Wachovia offers 100 percent financing and there is no income limitation, said Lori Todd, a mortgage consultant with the bank. There is a limit on a home's selling price, though, and the bank examines credit history more closely.

"There's a $150,000 sales cap for students in residence at the college. For physicians we offer loan amounts up to $350,000. With this program, the couple cannot have a bankruptcy," added Ms. Todd.

Students who only want a degree from MCG and intend to move to another city or state upon graduating can still qualify for a loan under this program, Ms. Todd said.

The other program offered by Wachovia is principally designed for couples just starting out, she said. The program also helps single people or low-income families who are first-time-home-buyers.

With the program there is a total household income limit of $28,500 and a home's sales ticket can not exceed $70,000. The program requires a 3-percent down payment; half of it can be a gift while the other half has to come from the couple, said Ms. Todd.

Because home buying can become very technical and intimidating, Fannie Mae offers free advice, counseling and educational materials to those interested in purchasing a home, said Mr. Carlsgaard. Call (800) 732-6643 (800-7-Fannie).

Some local banks such as SouthTrust offer special classes on how to buy homes, and continuing education courses, such as those at Augusta State University, offer similar classes.