Local governments assist with down payments

In Oakland, California, several years back, Lynne Jerome and her husband Brian Conan had for years wanted to become homeowners. But they could never put together enough for a down payment.1 "We tried," says Lynne, "but it was always out of our reach." With Lynne studying for a graduate degree and Brian's work as a truck driver, their family income didn't go far in the expensive California housing market.

"We always paid a lot of money for rent each month," says Lynne, "probably comparable to a mortgage payment, but instead of a mortgage we took out student loans to cover school expense. We hated throwing money down the drain for rent and couldn't see any long-term benefits of paying rent. We always took as much care of the property we rented as we would have our own home. Every time we would go outside and work in the yard or paint a room, it made us cringe because we could have been doing these things to our own place instead."

Fortuitously, Lynne and Brian no longer rent. Thanks to Fannie Mae's HomeOakland Initiative, this couple and their one-year-old daughter have now become homeowners. To buy their Craftsmen bungalow, they received a 2 percent down payment grant from the city of Oakland and a $35,000 mortgage assistance grant. 'Without the HomeOakland

1 If the lender can enforce a "due on sale" clause, this technique does bring about that risk. In that situation, a wraparound works better as a short-term financing strategy. If the lender calls, there may be no long term.

Initiative," says Lynne, "we would probably be working close to retirement before we could have afforded to buy."

In explaining Fannie's efforts, Larry Dale explains that, "Working together, cities and Fannie Mae can harness the expertise of nonprofits, Realtors, government agencies, mortgage lenders, and private developers. This combination of resources and combination of efforts is expected to have a far more positive impact on the community than previous, relatively uncoordinated efforts have had." In following through with its central Cities Initiative and Opening Doors Outreach Campaign, Fannie has put together partnership agreements with mayors and local lenders in the country's 25 largest cities.

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