Thinking About Buying a Home?
Thinking About Buying a Home? For many people achieving homeownership is an important goal. Not only does it instill a sense of pride, but it has financial benefits as well. Homeowners can deduct the interest they pay on their mortgage (long term loan), as well as their property taxes from their income taxes. It’s also a great way to build personal assets to ensure you maximize the value of your hard earned money. However, purchasing a home is also a big responsibility and should be taken seriously. In many cases it’s a good idea to meet with an experienced housing counselor who can guide you through the home buying process, review your credit, help you access different down payment programs and find the best mortgage product for your situation. Many community-based counselors provide this service free of charge.

Applying for a Mortgage
Most people borrow money to buy a home. This money comes in the form of a long-term loan, usually 15 -30 years, which is called a mortgage. To qualify for a mortgage, banks will want to review your credit history, monthly income, the savings you will use to pay for the downpayment and closing costs (bank origination fee, attorney's fee, taxes, escrow, and charges for obtaining title insurance, and home buying survey). In the past, most banks wanted borrowers to have at least 20% of the cost of the home saved, but today there are many more types of mortgages available. In some cases, banks offer mortgages that cover almost 100% of the cost of the home and even have special programs for people who have less than perfect credit.

Saving for a Down Payment
For many people, the lack of a down payment is the greatest hurdle to homeownership. This is especially true for first-time home buyers and people who earn a lower income. Today, however, lenders offer numerous special loan programs that require less money down. Some target first-time home buyers while others primarily help people who don't make much money. Additionally, the government and local nonprofits often provide grant funds to help people achieve homeownership. Examples of two such resources available in Memphis include a down payment assistance program offered by the Tennessee Housing Development Authority (THDA) as well as a matched savings plan administered by the RISE Foundation.

Watch Out for Predatory Lenders!
While there are many reputable banks that can provide you with an affordable mortgage, watch out for mortgage lenders or brokers that seem to be offering a deal that is too good to be true. These people are often time predatory lenders, who get you to take loans with high interest rates and hidden fees. Many times these people will come door to door or try to disguise their bad loans by associating themselves with a legitimate name like a government-sponsored down payment assistance program. They may even tell you that due to your credit history or income that another bank will not provide you with better financing. Don’t be fooled; know your options! Never rush to sign any papers before reading and understanding the loan terms completely, or having a trusted professional like a community-based counselor read through the documents with you.

Finding an Affordable Home
There are several nonprofit developers that build homes for people earning a lower income. Exact income requirements are based on your family size and are adjusted each year. For example, a family of four earning less than $45,850 and a family of six earning less than $53,150 are eligible fo a new home.

For an up-to-date listing of homes currently on the market contact the Community Development Council at info@memphiscommunitydevelopment.com or call
(901) 725-0460. You can also contact the individual community developers directly:

Cooper Young Development Corporation 2298 Young Memphis, TN 38104 Tel: (901) 272-1459 Fax: (901) 272-1455 Email: CYDC@bellsouth.net	Frayser CDC 3394 Overton Crossing Memphis, TN 38127 Tel: (901) 354-7178 Fax: (901) 354-7157 Email: fraysercorp@bellsouth.net http://www.fraysercdc.org
LeMoyne Owen College CDC 802 Walker Avenue, Suite 5 Memphis, TN 38126 Tel:(901) 435-1654 Fax:(901) 942-6448	Neighborhood Housing Opportunities 1548 Poplar Ave. Memphis, TN 38104 Tel: (901) 729-2934
Orange Mound CDC 2395 Park Avenue Memphis, TN 38114 Tel: (901) 327-4205 Fax: (901) 324-6245	United Housing, Inc 51 N. Cooper Memphis, TN 38104 Tel: (901) 272-1122 Fax: (901) 272-1181 Email: info@uhnic.org
VECA 1680 Jackson Avenue Memphis, TN 38107 Tel:(901) 276-1782 Fax: (901) 276-1784	The Works 1471 Genesis Circle Memphis, TN 38106 Tel: (901) 946-9675 Fax: (901) 946-6749

It’s important to remember that these organizations can only provide information on the homes they build so make sure you shop around and know all your options!