Initiative offers new homeowners a better deal

LIHU’E—Homeownership is now more affordable for approximately 100 Kaua’i

families thanks to a newly redesigned mortgage loan initiative announced today

by Mayor Maryanne Kusaka, the County Housing Agency, Central Pacific Bank and

Fannie Mae, the nation’s largest source of financing for home mortgages.

The new Kaua’i County Home Buyer Gap Mortgage Initiative was redesigned using

Fannie Mae’s Community Seconds Lending Option to help reduce down payment and

closing costs, and significantly lower the interest requirements on a second

“gap” mortgage, thereby saving Kauai first-time home buyers as much as $5,000

for the purchase of a home.

“This is great news for Kaua’i families who are

at risk of getting priced out of the housing market,” said Kusaka.

“By

using Fannie Mae’s Community Seconds Option, the County Home Buyer Initiative

will now help families save thousands of dollars when purchasing their first

home by significantly lowering down payment requirements and deferring interest

payments on a second gap mortgage.”

“The need for affordable housing

resources in Hawaii is greater than ever,” said U.S. Sen. Daniel K. Inouye in a

prepared statement.

“This new County Home Buyer Initiative helps fulfill

that need,” he said.

The Kaua’i County Home Buyer Gap Mortgage Initiative

helps home buyers meet the costs of a home purchase not covered by a

conventional first mortgage by offering a second ” gap” mortgage loan.

The

new mortgage loans offer a low 1.5 percent down payment requirement, and do not

require two months of reserve savings to qualify as was required under the

previous program.

In addition, the second gap mortgage carries a low

interest rate of 3 percent, which is deferred for the first seven years of the

mortgage. The conventional first mortgage will carry the market interest

rate.

As a result, a borrower purchasing a $175,000 home can utilize the

Home Buyer Gap Mortgage Initiative to receive a mortgage loan with low down

payment and closing cost requirements and deferred monthly interest payments to

help save more than $5,600.

The Home Buyer Gap Mortgage Initiative is

available at Central Pacific Bank to first time home buyers earning up to 80

percent of the Area Median Income ($51,700). Borrowers are required to

participate in home-buyer education and counseling classes.

“Increased

access to more lending programs will help expand homeownership throughout the

island,” said Ken Rainforth, executive on housing, Kauai County Housing

Agency.

“That is why we redesigned our previous home buyer program with

Fannie Mae and Central Pacific Bank to improve the benefits borrowers can get

using the new gap mortgage. The County Home Buyer Initiative will help more

home buyers afford to close the deal on the home of their dreams, and allows

more lenders access to this new product in the future,” he said.

For more

information on the Home Buyer Gap Mortgage Initiative, contact Central Pacific

Bank in Lihu’e at (808) 245-3311 or in Kapa’a at (808) 821-6900, or call the

County of Kauai Housing Agency at (808) 241-6455.

For more information on

Fannie Mae’s Community Seconds Lending Option and other affordable mortgage

products, consumers may call Fannie Mae’s Consumer Resource Center at

1-800-7-FANNIE (1-800-7326643), Monday through Friday, from 8-00 a.m. to 5

p.m. EST.