By DENNIS FLOYD
President, Home Builders
Association of Midwest Georgia

The U.S. homeownership rate rose to 66 percent in the third quarter of 1997, the highest level ever recorded. A record 66.7 million Americans now own their own homes.

For many people, making the jump from renting to homeownership is an important financial hurdle to clear. With mortgage rates at low levels and housing inflation in check in most areas, now is an excellent time for renters to become homeowners, as the recent homeownership statistics would indicate.

There are many sources of assistance for prospective first time buyers. A good place to start is with your state housing finance agency (HFA). HFA's have been given authority by thier state governements to develop programs to finance affordable housing. HFA's typically run mortgage-revenue bond programs. Because interest on the bonds is tax-free, they can be issued at lower interest rates. The money raised by selling the bonds can then be lent by the HFA's to first-time buyers at below-market rates, thereby amking the monthly mortgage payments more affordable.

State HFA's work with many partners, including organinzations such as Fannie Mae. Fannie Mae is a private company that works to ensure that mortgage money is available for people in communities across America. It does not lend money directly to home buyers. However, by purchasing mortgages from lenders, Fannie Mae frees up money for making additional loans.

In March 1994, Fannie Mae announced an unprecedented "Trillion Dollar Commitment" to address the unmet housing needs of American families. Under this commitment, Fannie Mae will earmark $1 trillion to finance more than 10 million homes for low-income families, minorities, new immigrants, families who live in central cities and other undeserved communities, and people with special housing needs. A principal purpose of the program us for Fannie Mae to work with other industry partners to eliminate barriers to homeownership.

First-time buyers should not overlook some of the long-standing government programs which facilitate homeownership. Buyers may be eligible for loans guarentted by either the FHA (FHA) or the veterans administration (VA). These federal agencies do not lend meny directly, but by providing guarantees, they allow lenders to offer loans with lower down payments.

First-time purchasers also can make use of a special new provision in federal tax laws. In 1997, Congress passed a new provision allowing first-time buyers to withdraw up to $10,000 from their IRA accounts if the money is used for the down payment on a home. The penalty-free provison can be applied to IRAs owned by the buyers, the parents or grandparents. Under current law, early withdrawels from an IRA incur a 10 percent penalty.

The programs described above only scratch the surface of some of the opportunities that may be available for prospective first time buyers. Your state HFA may be able to provide you with information about programs that exist at the federal, state, and local levels. You should also talk to local lenders and local housing agencies to learn more about available programs.

So if you are a renter who thinks that you could not possibly afford to buy a home, think again. Information about a program that could make you a homeowner may be only a few telephone calls away.

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