Introduction

Home Sweet Affordable Home, a Consumer Guide to Affordable Housing, was developed by the Utah Bankers Association (UBA) as a resource for individuals seeking affordable housing in Utah. 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, or those who are looking for options to avoid foreclosure. The guide contains information regarding resources and programs available to individuals and families seeking affordable housing options or help throughout the state.

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

The UBA prepared this guide to provide information to the general public regarding affordable housing tools. 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 services meet the individual or family’s particular housing needs.

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

For more detailed and updated information on this guide and the programs listed, please visit our web site at www.homesweethomeutah.org.

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 to 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 may 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 lists programs that offer better interest rates should you qualify.

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

Know Before You Rent

While purchasing and owning a home is an exciting prospect, it should not be done without considerable thought and planning. We understand that purchasing a home is clearly not always possible for or wanted by individuals and families. In those instances, renting is a good option. There are many things to know before renting housing as well.

The Section 8 Housing Choice Voucher (HCV) Program is a federal program that provides rental assistance to low-income families at or below a certain percentage of the area median income (AMI). For AMI levels, see page 44. The HCV Program is funded by the U.S. Department of Housing and Urban Development (HUD) and is administered by a public housing authority.

Housing authorities generally have one or both of two different types of rental subsidies, tenant-based and project-based programs. Households with a tenant- based subsidy have a voucher that allows them to move from one place to another. Those in the project-based programs live in a building in which the units are subsidized. Often, there are long waiting lists for Section 8 subsidies, depending on the need in the area. This booklet contains information on how to contact your local housing authority.

Know Before You Foreclose

If you are having difficulty making your current mortgage payments, there are several organizations in Utah who can provide assistance through resolution counseling, debt management and loss mitigation. In addition, it is important to understand how to avoid foreclosure. The key is maintaining a relationship with your lender and contacting them as soon as the problem begins. Getting help early in the process is much easier than after you are behind on payments. It may also be helpful to work with a housing counselor. A list of HUD-approved housing counselors in Utah is available on page 41.

The federal government, through the Making Home Affordable Program, also offers assistance to those struggling with current mortgages, through refinancing options to make your monthly payment more affordable. To learn more about your options, please see http://www.makinghomeaffordable.gov/. To learn more about refinancing in general, please visit www.federalreserve.gov/pubs/refinancings/default.htm.

The Utah Foreclosure Prevention Taskforce, created through the Governor’s Office, is another helpful resource in finding counseling or in dealing with predatory lenders.

You should be aware of foreclosure assistance scams. To avoid scams, consult with your mortgage lender, an approved housing counselor or and approved housing agency.