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Want to Buy a Home? The City Doesn't Want to Help.
Unaffordable housing by Ray Calnan/LAist
With all the recent hype about problems affording homes in Los Angeles and several of the Council members endorsing a plan to keep housing affordable, it appears that the City supports home ownership.
However, in an email sent to mortgage brokers, the City has indicated that it will be discontinuing the down payment assistance programs that have been getting a lot of use recently.
The standard problem of lack of funds is cited. When reading the email below keep in mind that the program being cancelled provided up to $90,000of down payment assistance to people who needed it. This isn't a blanket program that everyone can take advantage of, like rent control, it was specifically aimed at those in need. The programs retained provide a few thousand dollars in comparison to the nearly $100,000 previously available.
The city council and mayor have been complaining about funds, but the city revenue has grown over the past 5 years by at least 5% per year. The total revenue growth since the 02/03 fiscal year to the 06/07 year is 31.11%. Clearly, you must account for inflation which has been 15.69% over the same period.
Below is the email from the city.
Dear Los Angeles Housing Department (LAHD) Homeownership Program Partner: Re: Important Announcement Regarding LAHD 2008 - 2009 Homeownership Budget and Programs
The City of Los Angeles has approved its Consolidated Plan Budget for the 2008-2009 Program Year (April 1, 2008-March 31, 2009). The Low-Income Purchase Assistance Program budget has been significantly reduced from the current year's allocation. Additionally, decreased funding is anticipated for LAHD's Moderate-Income Purchase Assistance Program.
As a result of the reduction of LAHD's Homeownership Program budgets and the current foreclosure crisis (approximately 5,235 foreclosures occurred in the City in 2007), LAHD will redesign its Homeownership Programs to utilize its limited resources in a post-foreclosure/neighborhood stabilization strategy to mitigate the negative effects of foreclosures on the City's neighborhoods.
Consequently, LAHD is canceling the Reservations Waiting Lists for both the Low and Moderate Income Purchase Assistance Programs and will no longer accept reservation requests. Please notify your borrowers and real estate partners of the unavailability of LAHD Low and Moderate Income Homeownership Program funds.
Despite the unavailability of funds and cancelation of the waiting lists for the Low and Moderate Income Purchase Assistance Programs, LAHD has two other Homeownership Programs currently available for eligible first-time homebuyers: Mortgage Credit Certificate Program (MCC) and the American Dream Downpayment Initiative (ADDI) Program. Please see the attached program flyers or contact Homeownership Unit staff for additional information.
During the past several years, LAHD has continuously assessed and made improvements to its Homeownership Programs which included increasing the amount of purchase assistance for low-income homebuyers and the creation of the Moderate Income Homeownership Program. Since fiscal year 2003, with your support, LAHD has committed $61 million to assist 717 low and moderate income homebuyers achieve the American Dream in the City of Los Angeles.
LAHD thanks you for your support, participation and continued interest in our Homeownership Programs and will continue to keep you apprised regarding the redesign of its Programs and any budgetary changes.