Gov. Jack Markell unveiled two new programs to reduce the cost of buying a house in Delaware.
Under the first initiative, the Delaware State Housing Authority will cover the mortgage insurance costs for new home buyers who cannot afford the 20 percent down payment at the time of settlement.
Markell said Tuesday he expects the program could save potential homeowners roughly $73 per month, or $876 per year, about the cost of a mortgage payment.
Individuals who cannot afford the down payment on a house are required to pay a monthly mortgage insurance fee to protect the lender in case of a default. The buyer will pay a slightly higher interest rate in lieu of mortgage insurance costs.
“This ought to be a total win-win,” Markell told a group of home lenders and builders in Newark. “It will get more people into the position to become a homeowner, which ought to be good for all of your businesses. We will put more people to work.”
The program will not increase risk for lenders because a buyer would still need to pass a credit check and be approved for the loan, Markell added. He noted that the savings generated for families not paying mortgage insurance will improve their financial footing.
A second program will allow homeowners to combine mortgage and home-repair loans into one payment. Loans used for simple repairs such as painting or new carpets and more expensive loans to replace a roof or add energy-efficient upgrades will both be eligible for the program.
The loan-combination initiative is a reboot of a previous DSHA program. Markell said the new version is more attractive to lenders, but also will benefit them.
“[Homeowners] can buy a home for a low price, make the repairs and not only have the home of their dreams, but have immediate equity that can provide financial security for their families,” the governor said.
To qualify for both programs, applicants must be income-eligible and not exceed a maximum loan amount of $417,000. Interested parties can apply for the programs through a participating lender.
“More people get to achieve their dream,” Markell said of the programs. “It’s stronger for the communities. It’s stronger for the economy, generally, and creates jobs for all of you.”
DHSA Director Anas Ben Addi said the program will create benefits for homeowners.
“DHSA makes it a priority to search for new and creative ways to expand the number of programs available to home buyers so that we can best meet their needs and offer products that will help them be successful,” Addi said.
Original writer - Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ email@example.com.