State-Backed Loan Program Can Aid Home Availability : More liberal provisions, requested by Gov. Pete Wilson, should ease way for buyers.

In 1970 I served as a member of the Low Income Housing Study Team for UC Irvine. It was our purpose to identify housing needs and solutions for housing the low-income population of Orange County.

Since then, housing needs have dramatically grown for low-income families--and moderate-income families as well.

Last December, a report by the Orange County Homeless Issues Task Force cited a need for over 40,000 affordable units by 1994 for 319,700 families earning 80% of the median income or less. The 1990 census pegs the county’s annual median income at $45,922. By definition, lower-income households earn up to $35,738 per year. These households include people who work as preschool teachers, registered nurses, secretaries, truck drivers, electronic technicians and food service workers. Many have found housing in the hinterlands, as far away as San Bernardino and Temecula. These folks, who work and support the economy of Orange County, commute up to four hours each day, adding to the traffic and pollution problems.

The solution is simple--a larger supply of affordable housing that would permit people to live where they work, where they grew up and went to school. However, what might appear to be a simple solution is fraught with complex stumbling blocks.

NIMBY (not in my back yard) attitudes that affordable housing might depreciate existing neighborhood real estate values, infrastructure costs that can no longer be financed from property taxes and high costs of land and construction are a few roadblocks to more affordable housing.

Low down and monthly payments have historically been one of the keys to unlocking the dream of homeownership. In that regard, the California Housing Finance Agency has good news for prospective home buyers. On Jan. 14, the CHFA’s board of directors, at the request of Gov. Pete Wilson, approved a 97% CAL-Home Buyer Loan Program for new construction. In Orange County the maximum sales price could be as high as $242,200. CHFA hopes to have this program operational very soon.

At the request of Gov. Wilson, CHFA is researching other financing proposals that could provide affordable homeownership opportunities to first-time buyers. One such proposal is an Equity Link program in which a 100% mortgage could be obtained. The home buyer’s parents or qualified employer would pledge a part of the equity in their home or other collateral equal to 10% of the purchase price in lieu of a down payment.

Wilson has also asked for research on new construction loans to builders of affordable housing.

A big part of the deep recession of the home building and construction industry is the credit crunch and inability of home builders to access construction loans. CHFA is trying to find a way to assist home builders in increasing the supply of affordable housing and to help the construction industry get back on its feet.

I am hopeful that we might begin to restore the dream of homeownership and affordable housing.