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
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.
