Lynnette Khalfani - The Money Coach™ Newsletter
2-21-2007
Hi All:
A lot of you recently have asked me about ways in which you can get your first home -- even if you have bad credit, limited cash, or no down payment available.
Well, I’m pleased to tell you that in the March issue of Black Enterprise magazine, I’ve written an article on this very topic. It will tell you all about how you can move from renter to homeowner - regardless of your credit and cash situation. If you want to buy a home, don’t miss this article, which is now on news stands.
By the way, the organizations and banks that are featured in this article don’t charge sky-high interest rates. In fact, many of them will offer you money for a down payment, and interest rates that are just as good -- if not better -- than what people with perfect credit can obtain.
For example, for potential homebuyers in the greater Chicago and greater Detroit areas, one of the most exciting first-time home-buying programs launched in recent years was created by LaSalle Bank.
In Nov. 2004, LaSalle launched a community home lending group and began working with churches and low to moderate income residents to help create first-time homebuyers. The bank knew that there were federal dollars out there for down-payment assistance, but it soon found that institutions are limited – to the tune of $150,000 - in their ability to tap into those dollars and put them in the hands of consumers.
So instead of worrying about getting federal money to finance its first-time buyers program, LaSalle decided to put up its own money. The bank began with a $1 million commitment, and it quickly grew to $2 million, according to Carl Pietraszewski, Vice President, regional sales manager and community reinvestment officer at LaSalle Bank. In 2006, LaSalle provided more than 700 homeowners with nearly $2.5 million in down-payment assistance. And the number of homeowners aided by LaSalle is expected to increase in 2007 as the bank tweaks its down-payment assistance amount to $2,500 from $3,000 in a bid to help more individuals and families.
Best of all, the LaSalle program has more liberal income and credit criteria than most similar initiatives. “We work with buyers who have credit scores as low as 550,” says Pietraszewski, “and we charge current market rates, right now about 6.25%, that normally only a buyer with ‘A’ credit would get.”
For starters, LaSalle doesn’t impose the 80% income cap that’s common in most federal housing assistance initiatives – meaning federal programs typically require your income to be at 80% or less than your regional median. Qualified buyers with incomes that are at 100% or below the median income for their area qualify for aid from LaSalle. Additionally, flexible underwriting guidelines mean that buyers with “alternative credit” profiles need not shy away. So if you’re renting, drawing income from a second job that pays cash, or only have utility bills to show your track record as a steady payer, you can still qualify. Even individuals who have been involved in “group savings” activities such as a Susu – the West Indian term for pooled money – are eligible.
If your income falls above the median range for your area, but you still need help in making the leap to home ownership, check out the Institute for Housing Innovation (www.inhousing.org). This nonprofit organization promotes the development of mixed-income neighborhoods through reduced-cost homes for people in all income categories.
Again, check out the March issue of Black Enterprise magazine for additional tips and referrals to banks and programs that will help you to get Your First Home!
Best,
Lynnette Khalfani,
The Money Coach
Lynnette Khalfani, a former Wall Street Journal
reporter for CNBC, is the author of
The Money Coach’s Guide to Your First
Million and the New York Times bestseller
Zero Debt: The Ultimate Guide
to Financial Freedom. She has appeared on Oprah, The Tyra Banks Show,
Dr. Phil and Rachel Ray. She has also been featured in The New York
Times, USA Today, Redbook, Essence and Black Enterprise Magazine.
Lynnette's next book,
Zero Debt for College Grads: From Student Loans to Financial Freedom
will be available in May 2007.
Feel free to email this
newsletter to anyone you think needs to improve their personal finances. For
more information about Lynnette, visit her website at
http://www.themoneycoach.net.