Southwest Virginia Area Housing Organizations Receive $13 Million in Financing to Address Housing Needs

Five Southwest Virginia housing organizations are receiving good news and much needed funding for first-time homebuyers in the Southwest area. The Virginia Housing Development Authority recently announced that it is allocating $13 million in low-interest financing to these groups to finance affordable homes in Southwest Virginia.

The allocations are funded through VHDA’s Sponsoring Partnerships and Revitalizing Communities (SPARC) program, which provides home loans to potential homebuyers through local governments, non-profit organizations, developers and redevelopment and housing authorities. The organizations then combine a variety of local, state and federal loan and grant programs to design a variety of financing options that meet the needs of buyers in their specific communities. Organizations that received SPARC funding are eligible to receive allocations at an interest rate of 1/2 to 1 percent below VHDA’s rate for first-time homebuyer programs.

In addition to providing customized home financing programs, SPARC funds also support VHDA’s strategic initiatives, including community revitalization and addressing the housing needs of seniors, minorities and those with disabilities.

Below is an overview of the Southwest organizations that received SPARC allocations and the programs they designed for the funding:

County of Pulaski has been awarded an allocation of $1 million to assist borrowers purchasing new or existing homes throughout the area. To help making housing more affordable, water and sewer connection fees, as well as building permits will be waived for new construction.

Little Ten Housing Authorities of Southwest Virginia has been awarded an allocation of $5 million to assist borrowers purchasing existing homes, revitalized homes and new homes in the Counties of Buchanan, Dickenson, Lee, Scott, Wise, Smyth, Wythe, Tazewell, Russell, Washington and the Cities of Norton and Bristol. Each area housing authority will offer unique programs and goals. CDBG funds will be utilized to reduce the costs of homes by subsidizing the infrastructure costs.

People Incorporated of Southwest Virginia has been awarded an allocation of $500,000 to assist borrowers purchasing new and existing homes in the City of Bristol and Counties of Buchanan, Dickenson, Russell and Washington. New Homes are energy efficient and Earthcraft certified. Individual Development Accounts (IDA), Federation of Appalachian Housing Enterprises (FAHE), HOME and Federal Home Loan Bank (FHLB) funds will be available to provide downpayment and closing cost assistance.

Town of Pulaski has been awarded $1 million to create affordable homeownership opportunities for borrowers. The Town of Pulaski in conjunction with Pulaski Redevelopment and Housing Authority will promote the sale of existing and new housing. In addition, the Town of Pulaski will waive connection fees and building permit fees. An employee assistance program has been implemented that will provide $2500 to assist borrowers with downpayment and closing costs.

VHDA Direct Originations has been awarded an allocation of $5.5 million to provide affordable resources to rural areas not typically served by VHDA lenders. VHDA’s mobile mortgage units will originate loans. HOME funds will be available for downpayment and closing costs assistance.

“We developed the SPARC program so that our housing partners could bring us customized programs that generally are not available from private lenders or through VHDA’s regular lending programs,” said Don Ritenour, VHDA’s managing director of development. “Our partners have the knowledge and direct insight into the unmet needs in their communities. They are in the best position to design programs that combine the local, state and/or federal funding they have received with our SPARC monies to make every dollar count.”

Organizations submitted proposals to VHDA in April 2007. All proposals underwent an initial eligibility review and a subsequent competitive review process.

In addition to addressing local needs, the proposals needed to support some or all of VHDA’s homeownership goals including: helping provide loans to low-income households, diverse cultures, minority populations and persons with disabilities; encouraging the construction or rehabilitation of homes for accessibility and overall quality improvements; revitalizing communities; and meeting housing needs not met by traditional lenders.

Proposals that significantly support VHDA’s business goals received an allocation of funds at an interest rate of 1 percent below the rate for VHDA’s first-time homebuyer loan program, which at today’s rate would be 5.125 percent for a 30-year fixed rate loan. Other allocations had an interest rate of ½ percent below VHDA’s first-time homebuyer rate. Exact rates are determined at the time of actual loan reservation.

VHDA’s SPARC program has allocated more than $730 million to housing organizations to encourage homeownership throughout Virginia since the program was created five years ago.

For more information about the SPARC program, call the Virginia Housing Development Authority at 1-877-VHDA-123 or visit its website at www.vhda.com.

VHDA is Virginia’s housing finance agency. It is a self-supporting authority that issues bonds to raise private capital for its lending programs. VHDA provides consumers with low-interest rate loans to purchase or renovate homes. VHDA also lends money to developers for the development, rehabilitation and renovation of affordable apartments.