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Home Loans for Low- Income Families
Creators Syndicate
FIGHT BACK! BY DAVID HOROWITZ
Home Loans for Low-Income Families
There's good news for families who want to buy their own
homes. Fannie Mae, the federal home-mortgage agency, plans to make $1
billion available for home loans over the next six years for low- and
moderate-income buyers.
Along with the money, Fannie Mae is putting out new guidelines
for lenders who will make the federally backed loans. The whole effort
is targeted at would-be home buyers who, until now, could not qualify
for a conventional mortgage. Under the new rules, lenders will
consider an applicant's "alternative credit" history -- records of
rent payments, utility accounts and employment histories. Those are
often the only credit references low-income people have, even though
they can afford the monthly loan payments.
Fannie Mae is also reaching out to prospective homeowners with
counseling, assistance and information about the new home-loan
program. They want to bring in those people who've been turned away by
lenders in the past and have given up on owning their own homes. The
government plans to reach every renter in America with home-ownership
information by the year 2000.
But are these people really good loan risks? Obviously, that's
what worries the banks. Surveys show that low-income homeowners are
highly motivated to keep up their payments and protect the only real
asset they own. Pilot lending programs for these people often have a
lower default rate than the na- tional average. If lending to
low-income homeowners is a risk, it's a risk the Clinton
administration is willing to take to bring the benefits and stability
of home ownership to millions of Americans who could not otherwise
afford it. ***
There's more good news for home buyers. The Internal Revenue
Service has just loosened up the rules on deducting points -- the
up-front origination fee lenders charge on home loans. (Each point
equals 1 percent of the loan amount.)
In order to sell a house, the seller sometimes agrees to pay
half the buyer's points -- a sort of discount on the asking price. In
the past, buyers could deduct only the amount they actually paid in
points. The new rules say they can deduct all the points on the loan
-- even if the seller pays half. That's an additional couple of
thousand dollars in deductions. The change is also retroactive and
applies to homes purchased after Dec. 31, 1990.
That means that unless you are buying a home this year or have
filed for an extension, you'll have to file an amended return on Form
1040X for 1991, '92 or '93. That's not a big deal, especially if it
means getting money back from the IRS. Just write Seller Paid Points
in the top, right-hand portion of the form, and attach a copy of the
settlement agreement (Form HUD-1) to your amended return.
Keep those seller-paid points in mind when you sell the house.
The IRS says that amount must be deducted from the purchase price when
figuring your capital gains tax. You should also remember that points
are deductible on home purchases, not on refinancing your present
home. COPYRIGHT 1994 CREATORS SYNDICATE, INC.
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