Introduction

The Affordable Housing Consumer Guide was developed by the Utah Bankers Association (UBA) as a resource for individuals seeking affordable housing in the State of Utah. The guide contains information regarding resources and programs available to individuals and families seeking affordable housing options throughout the state. The purpose of this guide is to present information in a manner that is most helpful to those who would like to purchase or rent housing in Utah.

One of the most important aspects of strong communities is having a wide range of housing options available to those who provide essential community services. But renting or purchasing a home can be a challenge, with higher home prices and an array of mortgage options that can be confusing. The good news is that federal and state government, counties, cities and non-profit agencies offer many tools that are useful to those looking for affordable housing.

The UBA prepared the Affordable Housing Consumer Guide to provide information to the general public regarding affordable housing opportunities throughout Utah. The qualifications, requirements, and contact information for these programs are provided. The UBA does not endorse any one program; rather, it recommends further investigation by interested individuals to determine if the program meets the individual or family’s housing needs.

This resource is provided by the UBA as a service to our communities. We are a vital part of Utah communities, and we work hard to provide resources and solutions for community needs. Utah banks assist to provide affordable housing, promote small business development, support community revitalization, and provide community services to low-and moderate-income individuals.

Know Before You Buy

Buying a home is an investment. While rent payments and mortgage payments can be similar in cost, owning a home has many financial benefits over renting. When you own your home, you can deduct your mortgage loan interest and property taxes from your federal and state income taxes. In addition, the value of your home will likely go up over the years, enabling you to generate earnings when and if you sell or eventually stop making monthly payments for housing.

However, there are costs associated with buying and owning a home. The cost of your housing should not exceed 30-40% of your total income, whether buying or renting. When owning a home, you will need to pay for taxes, utilities, insurance, and maintenance. These costs should be included in that housing percentage budget.

First-time home buyers usually need at least 3% of the home’s purchase price as a down payment. Some loans even require a 10-20% down payment. Buyers also need to have earnest money (the deposit you make when you submit an offer on the home to show you are serious about wanting to buy the house) and closing costs (the paperwork processing costs to buy a home). Some programs in this booklet help cover down payments and/or closing costs if you meet the qualifications.

A major part of your mortgage loan will be your interest rate, which is dependent upon your credit history. Average interest rates range from 6.5-10%. The absolute minimum credit score for those purchasing a home is 580. The higher the credit score, the better your interest rate will be. This booklet contains programs that offer better interest rates should you qualify.

Several organizations offer homebuyer education classes, including many of those in this guide which provide assistance. These classes may be helpful to those looking to purchase a home. For more information about buying a home or how to find homebuying courses, visit www.hud.gov/buying.

Housing and Economic Recovery Act of 2008

Buying a Home
As you may have heard, as a way to combat the housing decline, the federal government passed a new incentives package for first-time home buyers. First-time home buyers who purchase a home between April 9, 2008 and July 1, 2009 will receive a one-time tax credit of 10% of the home’s purchase price or $7,500, whichever is lower. It is important to note that this credit must be paid back. Repayments are required in $500 increments deducted from income tax returns for 15 years, beginning 2 years after the home purchase. For example, an owner claiming the credit on their 2008 tax return will begin paying back the money on their 2010 return.

Refinancing a Home
The federal housing bill also offers assistance to those struggling with current mortgages, through refinancing options. To learn more about the bill, please see www.hud.gov. To learn more about refinancing, please visit www.federalreserve.gov/pubs/refinancings/default.htm.