Overview
The second leg of the self-sufficiency stool is affordable housing. A continuum of affordable housing options is necessary for families to become and remain self-sufficient. To make these options available, the Commission partners with other non-profit and for-profit organizations to rehabilitate homes for sale and to produce affordable rental units. These partnerships have produced 151 units of low income family and elderly housing in Dauphin and Perry Counties for a total cost of $10.8 million.
 |  | The adaptive re-use of the McFarland Press building
produced 49 affordable housing rental units. |
The Commission also provides pre- and post- home ownership counseling to qualifying families. In support of housing development, the Commission's housing counselor shows affordable housing and works with interested would-be homeowners to help them secure reasonable and non-exploitative financing. The Commission also serves as a point of contact for the Pennsylvania Housing Finance Agency's Homeowner Emergency Mortgage Assistance Program, through which predatory lending practices come to light.
FAQs
Q: What are the advantages and disadvantages of buying a home over renting?
A. The advantages outweigh the disadvantages:
- Buying a house is a kind of savings plan, because through mortgage payments, equity builds and the homeowner can borrow against that equity, or turn it into cash by selling the house.
- Over time houses usually increase in value .
- Unlike rents, which usually increase each year, mortgage payments stay the same for the life of the loan.
- Homeowners get a federal tax break on the mortgage interest and property taxes they pay each year.
- Families can become established in a neighborhood without fear that a landlord will ask them to move. Homeowners who have set down roots in a neighborhood build long-term relationships that tenants do not.
- Purchasing and maintaining a home builds pride and a sense of accomplishment.
- There's a positive snowball effect. When one homeowner improves his/her property, there is an 80% likelihood other homeowners will do the same!
B. The disadvantages of home ownership can be:
- Increased costs, even if the mortgage payment is less than rent, because of taxes, insurance, utilities and maintenance.
- More responsibility and more work because the homeowner, and not a landlord, has to take care of mowing the lawn, fixing gutters, painting, replacing appliances, etc.
- Decreased mobility because home ownership makes it more difficult and more expensive to move.
Q: How do I get a mortgage?
A. Lenders want to be sure you're a good "risk" -- that the money they lend you can and will be repaid. So, they use these guidelines to qualify loan applicants:
- Income
- Income stability
- Credit history
- Ratio of your debt to your income
- Availability of funds for "closing"
- Demonstrated ability and willingness to handle a consistent mortgage payment
Q: What would cause me to be turned down for a mortgage loan?
A: Not meeting the guidelines above:
- Credit problems
- Poor rental history
- Inadequate or unstable income
- Insufficient down payment
- Too much debt
Q: What do I do if I'm turned down for a mortgage loan?
A. You can take some steps to improve your situation:
- Review your credit history
- Pay off any judgments against you, or unpaid debts
- Contact the Commission housing counselor to assist you in re-establishing good credit
- Reduce your debts
Q: How much cash will I need to get into a house?
A. You'll need a down payment, which typically is anywhere between 3% and 20% of the purchase price of the home, and that money may NOT be borrowed. When the down payment is less than 20%, the lender will usually require the home buyer to purchase private mortgage insurance (PMI). Government-insured mortgage loans, such as FHA or VA, usually require lower down payment amounts.
You'll also have to pay up-front "closing costs," which typically range from 3% to 6% of the mortgage amount, for all the fees involved in the transaction. This does not, however, include the Realtor's fee, which is paid by the seller out of the home's sale price.
By law, lenders are required to give a home buyer an estimate of these closing costs within three business days of the loan application, and a statement of settlement costs 24 hours before closing, if you request it.
For more information on the Community Action Commission's housing services, phone (717) 232-9757 or e-mail: housing@cactricounty.org
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