Program Helps Qualified Home Buyers with $15K Down Payments
Despite bargain-basement home prices and all-time low interest rates, many Twin Cities families still can't afford to buy a house.
Wells Fargo Bank says it wants to change all that.
Hundreds flocked to the Minneapolis Convention Center Friday in hopes of qualifying for a $15,000 down payment on a home. It's called the "NeighborhoodLIFT" program, and it's meant to help hard-working folks who can't qualify for a home loan, given the tight lending restrictions that are now the norm after the economy and housing market tanked.
In all, Wells Fargo has more than $7 million to hand out to about 500 people or families who qualify.
In theory, each $15,000 thousand down payment is free. All you have to do is live in the new house you buy with that money, for five years.
"It's kind of like, 'oh my goodness'!" said Coral Chino. That was her reaction when the financial team here told her she was qualified. Coral brought her last two tax returns, her w2s, two months of paychecks, and, wallah! "They told me 'you can get the $15,000,start looking for a house'!"
And so she did, through a virtual (computer graphic) tour of properties in Minneapolis and St. Paul currently up for sale--homes she would otherwise never be able to afford. "Having a child and being a recent grad, it's hard to save up," Coral said.
According to Kim Smith-Moore, the program manger of the bank's NeighborhoodLIFT program, "With the housing crisis we a surplus of housing inventory, so it's important we get people in those properties."
It's Wells Fargo's way of helping stimulate the economy. The household income of those applying cannot exceed 120 percent of the Area Median Income (AMI). In the Twin Cities, that translates to $70,500 for a single-person household, $100,700 for a four-person household, and $132,900 for an eight-person household. The program is administered through the nonprofit, NeighborWorks America and its affiliates.
Ryan Ecklund, another Friday recipient of a down payment, mused, "They just went through a lot of problems as well but people don't feel sorry for banks. Still, at the end of the day they have to lend to make money so why not give an incentive to do it, and get some good borrowers."
Ryan and his girlfriend Erika Baldas hope to find a home in North Minneapolis. They're new parents, and tired of renting. Under the rules, they now have 60 days to find a house--and they have no problem with the bank's caveat that they must stay put there for five years. Ryan summarized the agreement: "If we were to leave before the five years are up, we just pay back the portion in which we weren't there for five years, interest free. It's a no-brainer."
Leaders in both Minneapolis and St. Paul (which are the 10th and 11th cities, respectively, where Wells Fargo has introduced its NeighborhoodLIFT program), are in full support of the incentives. Melvin Carter, St. Paul's first ward city councilman, said, "There's a lot of people looking around who who wish they could take advantage of the buyer's market and the low interest rates but just can't because maybe they've had some trouble or maybe they just don't have the $15,000 in cash. Well, now they do!"
The event continues all day Saturday at the convention center. Pre-registration is not required and walk-ins are welcome. More information can be found at www.neighborhoodlift.com.
Mark Saxenmeyer can be reached at firstname.lastname@example.org