Substantial Grant To NRHA Is A Good Thing For First Time Home Buyers
July 31, 2008
The NRHA, Norfolk Redevelopment and Housing Authority, will receive funding to assist first time home buyers who are in the low to moderate income level. The Virginia Housing Development Authority announced over $13 million in funds. These funds are the larges amount of money that has been designated to any authority in the state and it will be allocated to NRHA to finance affordable housing in the city.
The funding comes from VHDA’s Sponsoring Partnerships and Revitalizing Communities, or SPARC program. SPARC provides loans below market rate to first time homebuyers with special allocations that are made by local housing groups. The funding is allocated annually and on a competitive basis to assist housing groups in the critical housing needs of the community. SPARC funding helps organizations obtain the allocations at 1/2 to 1 percent below the normal VHDA’s First Time Homebuyer Program rate. The entire allocation for NRHA was awarded at 1 percent below the fixed VHDA rate.
In addition the NRHA HOME Program was awarded nearly $6 million to assist eligible low to moderate income homebuyers and the HomeNet Homeownership Center was given over $7 million for the eligible market rate homebuyers. Naturally income limits will apply to both the market rate and the low to moderate income homebuyers. These awards will allow the NRHA to approve a one percent discounted interest rate for the first time homebuyer that is eligible. The homebuyer will then be able to purchase new construction homes in Norfolk with below market rate 30 year mortgages that will offer a more affordable monthly payment.
The awarded allocation is expected to help around 81 first time homebuyers. According to the current VHDA fixed rate an eligible homebuyer’s rate, being 1 percent less would reduce the principal and interest payment by 11 percent. It is estimated that the awarded money will provide up to $4 million in payments for all of the homebuyers who get assistance.
The combined NRHA and SPARC funds will be combined with other local, state and federal loan and grant programs that will create a variety of finance options to meet the needs of first time homebuyers who are buying within Norfolk. Additionally, a discounted SPARC interest rate will be available to eligible first time home buyers with a gross annual household income that is at 50 to 80 percent of the areas median income limit. A “soft second” forgivable no monthly payment loan through the NRHA HOME Program is also available to these qualifiers; which will provide down payment and closing cost assistance.
The Virginia Housing Development Authority is Virginia’s mortgage finance agency and was established in 1972 by the Virginia General Assembly. The mission of VHDA is to help low and moderate income residence obtain quality and affordable housing. The NRHA was founded in 1940 and is among the national leaders in community revitalization and fosters sustainable mixed income communities. They are the largest redevelopment and housing authority in Virginia and plays a major role in making Norfolk a choice city in which to build, work and live.
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