Wanna Buy A House But Only Have A Moderate Income? LA Has Money To Help. But It's Gonna Go Fast.
L.A. City Council wants to keep middle-class families close to their jobs and their kids' schools by boosting the city's home ownership rate, which at 35.9 percent is among the lowest in the nation. One way it's helping: offering loans.
On Tuesday, the council voted to restart the Moderate Income Purchase Assistance (MIPA) program. If you meet the criteria, you could qualify for up to $60,000 in home-buying assistance.
Interested? Here are the details:
What qualifies as moderate income?
It depends on the size of your household, and how your income compares to the area's median income. Households making as little as 81 percent of L.A.'s median income can qualify, as well as households making as much as 150 percent.
For instance, a family of four making more than $77,501 a year, but less than $116,300, would be eligible for up to $60,000, while another making up to $145,350 would be eligible for $35,000.
Do you have to pay the money back?
Yes -- but not for some time. The money comes as a zero interest loan which can be paid back when the house is sold, or after 30 years. In return, the city claims a share of the home's appreciated value.
Is this hard-earned taxpayer money that's being spent?
No -- the money comes from penalty fees associated with the city's foreclosure registry program.
Hmm, it all sounds a bit too good to be true
Well, there is a catch. Only $2 million has been allocated for this round, which, it's estimated, would help around three dozen families.
Okay, so how do I get to be one of the lucky few?
Loans are first-come, first-served, and there are criteria that have to be met.
- The program is open to first-time home buyers who plan to buy a house within the city of Los Angeles and use it as their primary residence.
- Borrowers still have to put some of their own money toward the down payment, but that can be as little as 1 percent.
- To qualify, borrowers have to be approved for a mortgage through a participating lender, and they must go through an eight-hour homebuyer education course.
How quickly could the money go?
The city last funded the MIPA program in October 2017. It ran out of money by April 2018 after helping 53 families buy houses.
Elba Schildcrout, director of community wealth for East L.A. Community Corporation, has seen a lot of interest in the program, even after it went dormant.
"Our organization alone has 50 to 60 families that can potentially apply for these funds as soon as they get released," she said.
What should I do if I'm interested in applying?
Remember, the new program still needs to be signed off by the Mayor before the money is released. But if you want to get yourself ready ahead of time, head to the Moderate Income Purchase Assistance website.
Editor's note: A version of this story was also on the radio. Listen to it here on KPCC.
Correction: An earlier version of this story incorrectly stated the MIPA program's loan limits. Eligible households in the lower income bracket can receive up to $60,000, and higher income households can receive up to $35,000. The department is legally authorized to loan up to $75,0000, but in practice it does not lend more than $60,000.
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