NationalMortgageNews reports the Tuscaloosa Credit Union (TCU) in Alabama is backing a program to help home buyers with poor credit realize their dreams of home ownership, following the departure of the big banks. After the mortgage rules changed, the second and third mortgages attached to the four homes prevented the banks from selling the loans on the secondary market. The Tuscaloosa Housing Authority (THA) coordinated $40,000 of the funding: $15k from THA and $22k from the city which comprise the 2nd and 3rd mortgages. As long as the resident remains in the house five years, the $15,000 is forgiven; 15 years, and the $22,000 is forgiven. With a value each of $110,000, that leaves $70,000 to be financed at six percent for 20 years. MHProNews.com has learned borrowers must undergo an eight week home ownership course and have a $1,000 deposit. Willie Fort, executive director of the Tuscaloosa Housing Authority says, “These are very credit-challenged borrowers, and getting them into their first home is a huge event in their life. They get very emotional at the closings.”
