May 13, 2008

Affordable loan program launches

Regional group partners with mortgage company in San Mateo

By Shaun Bishop / Daily News Staff Writer

A regional affordable housing group today will launch a new program to help moderate-income residents of San Mateo County obtain home loans in one of the country's most expensive markets.

The Housing Endowment and Regional Trust partnered with Meriwest Mortgage to create the program, intended for working families who "without some help would not be able to become home buyers and settle here," said Chris Mohr, the trust's executive director.

Borrowers will be able to take out a first mortgage from Meriwest and a second below-market-rate loan to reduce the first loan's interest rate. The loan funds also could be used to prepay mortgage insurance, which would cut down monthly payments.

Residents who are approved will need a 3 percent down payment, which compares favorably to the 10 or 20 percent down payments often required by mortgage companies, Mohr said.

"It's going to make many more homes more affordable than they could otherwise be," said Duane Bay, the county's housing director.

The Housing Endowment and Regional Trust will back the mortgages with some of its own reserve funds to give Meriwest some extra security, Mohr said.

Families with incomes of up to $150,000 who live or work in the county can apply. Mohr noted the income limit is "relatively high, but we think that's important for the work force of San Mateo County."

Applicants must also be first-time homebuyers or moving to a home that is "substantially closer" to public transit, among other requirements, Mohr said.

The trust reached out to about a dozen mortgage companies when it decided to start the loan program and Meriwest was the only one that responded, Mohr said.

Homes in San Mateo County are among the most expensive in the country, with the median price of a single-family dwelling at $875,000 in April, according to the San Mateo County Association of Realtors

The program marks a new venture into the mortgage market for Housing Endowment and Regional Trust, a regional private-public partnership formed in 2003 that raises funds for affordable housing projects.

For more information about applying to the affordable loans program, visit www.heartsmc.org.


E-mail Shaun Bishop at sbishop@dailynewsgroup.com.