Document text
http://www.omniture.com --> Sections Home Page Local News AP News Archives Business Classifieds Event Calendar Forums Life Opinion Obituaries Photo Gallery Since We Asked Sports Tempo Weather Special Coverage 2006 Britt Festivals --> Shop Our Valley AutoFinder HomeFinder JobFinder Search Our Valley Special Sections Homelife Magazine Joy Magazine Readers Choice 2006 Oregon Golf Info Oregon Wine Info Our Valley Other Publications Local Links Ashland News eSouthernOregon Newspapers In Education Personals Moving Here Movie Listings TV Listings Volunteer Customer Service Advertise With Us Media Kit Place Classified Ad Contact Us FAQ's Home Delivery Site Map --> Email Story to a Friend August 18, 2006 The McCords of north Medford were able to buy their first home under a special state loan program that was suspended this week. They are, clockwise from left: dad Aaron McCord and dog Maya, mom Misty with baby Khyron, Morgan, 5, and Ryleigh, 3. (Mail Tribune / Denise Baratta) Advantage lost Program for first-time homebuyers is abruptly suspended; proposed Measure 48 blamed for bonding jitters By John Darling for the Mail Tribune Local low-income housing advocates reacted with shock at the suspension of the popular Oregon Bond Loan program, which subsidized low-interest loans for low-income people for many years. The program was suspended Tuesday by the state treasurer's office out of concern that the proposed Measure 48, which would limit the state's budget and restrict the state's ability to issue bonds, might pass in November, according to an e-mail sent to lenders from the Oregon Housing and Community Services office, which administers the program. "It caught us by surprise. It's the best tool we have to help first-time homebuyers," said Donna Trembley, ACCESS housing resource specialist in Medford. "People are going to be forced to use 6.5 percent loans instead of 5.5. That can make a $20,000 difference and determine if they can buy or not." The measure is slated for the Nov. 7 ballot. "I'm absolutely stunned. It's a catastrophe, because low-income people's interest rates have been so low under this program," said Judi Robinson, loan officer with Peoples Bank of Commerce in Medford and a specialist in low-income loans. Advertisement "It's going to hurt quite a bit. Almost all first-time homebuyers use it," added Robinson, who has handled about 200 Oregon Bond Loan transactions. The program sells bonds to subsidize loans at below-market rates (3„4 to 1 percent or more below market) through state-approved lenders, said Trembley. No money comes form the state's general budget fund. State Rep. Peter Buckley, D-Ashland, called the program suspension "the first hint of what's in store for us if we try to go down that road of a state spending cap, as Colorado did. It proved a disaster for them and would be absolutely devastating if passed here." Buckley predicted Oregonians would "take a look at this, shake their heads and say, this is simplistic and it's not right for us." Sen. Alan Bates, D-Ashland, said the Oregon Bond program is "one of the few ways allowing young families to get into our skyrocketing housing market" and that, "while we're not saying the sky is falling, voters will have to be given the opportunity to understand what Measure 48 will mean to public safety, alcohol and drug treatment and many other programs if it passes." Aaron McCord of Medford, 32, a first-time homebuyer who just used the program to snare a 5.25 percent interest rate, said, "I'm kind of shocked the state would do that to such a good program. It's not like the state is wasting money here. I don't know how many people could get into the basic $250,000 house without it. The payment would be astronomical." His wife, Misty McCord, agreed, "It's been very beneficial, and we were grateful it was available to us." Bret Dixon, area director of the federal Rural Housing Program, which loans full mortgages to low-income residents, said, "It's too bad. The program has worked well with our program of guaranteed loans that have allowed people to purchase homes with no down, at the lower Oregon Bond rate." Aaron McCord just finished three years of schooling to become a paramedic with Mercy Flights — this while living with his wife and three children in a two-bedroom apartment. "We'd searched for nine or 10 months and thought we wouldn't be able to do this in Medford, where you can't find a shack under $250,000 unless it was built in the 1930s and needs total gutting and remodeling," he said. They accessed the Oregon Bond program, which, with several other programs, leveraged them into a $191,000, three-bedroom home, owing only $151,000, with payments of $989 a month. The Oregon Bond Program offers two plans: the Rate Advantage plan at 5.65 percent and, for buyers needing money for the down or closing costs, the Cash Advantage plan at 6.15 percent. The other programs used by the McCords were the Purchase Assistance Loan (PAL), providing up to $10,000 for down payment and closing costs, with no interest and no payments until you sell or refinance. McCord used a grant from his American Indian tribe for the down payment, then tapped into $15,000 from a program offered by the city of Medford with its federal Community Development Block Grant funds — also zero interest, zero payments, due on sale or refinance. "If not for the Oregon Bond program, we would still be renting for $1,200 to $1,300 a month for us and three children, instead of paying into equity on our own home," he said. The e-mail from Debbie Roberts of the Oregon Housing and Community Services office said, "(Measure 48's) limitations on the state's budget includes restrictions on the ability to issue bonds for many activities. Those limited activities include bonds to finance home ownership under the Oregon Bond program. Because issuing bonds today affects the state's budget over the long term under Measure 48, the State Treasurer is concerned regarding issuing state bonds for the homebuyers program until the passage or failure of Measure 48 is determined by the November election." The state suspended "reservations" for the program at 5 p.m. yesterday, but the e-mail indicated the suspension may be temporary and "will remain in effect until the outcome of the November election." John Darling is a freelance writer living in Ashland. E-mail him at [email protected]. Advertisement Copyright © 1997-2006 Mail Tribune, Inc. All rights reserved. Privacy Policy | Terms & Conditions | Website Feedback online casinos news Home Security Systems California Casinos Men's Clothing Southern Oregon Loans --> GMAT Prep Fundraisers Send Flowers Entertainment Guide --> Casinos Canada Trunks, Footlocker Online Casino Reviews