Letter to the Editor of The News Journal

I would like to commend the News Journal for the article focusing on the affordability of rental housing published on January 6th. The point of the article is important – many of our neighbors in this state have a very difficult time finding and keeping an affordable place to live.

We consider a household paying more than 30% of its income for rent to be cost burdened, and more than 50% of their income to be severely cost burdened.  Over 35,000 families in Delaware (nearly half of all renters) are cost burdened and nearly half of those families (17,000) are severely cost burdened.  What this really means is that the family is paying too much for rent compared to their income — putting stress on other expenses such as energy, food, clothing, school, etc (and we all know that those costs are escalating too).  The problem is getting worse as we recover slowly from the economic recession.  In 2000, 34% of renters in Delaware were cost-burdened; in 2010, an estimated 51% were cost-burdened.  And the problem gets worse as you move down the income ranges.

The Delaware State Housing Authority is dedicated to providing, and helping others to provide, safe and affordable rental housing opportunities for Delaware’s low- and moderate-income families.  We do this primarily by financing the development of affordable rental housing, which requires an investment from the State.  Since the beginning of the Markell Administration, the state has invested $44 million into the Housing Development Fund which has leveraged more than $100 million in other private and public funds and resulted in the rehabilitation and construction of 921 affordable rental units at 19 sites across the state.  This activity has also resulted in creating and sustaining nearly 900 jobs in the construction field – one hit hardest by the recession.

In addition to making sure there are units available, DSHA is also concerned with making sure people can find homes they can afford in the neighborhoods in which they want to live.  To help on that front, we recently launched a free housing locator called DelawareHousingSearch.org, a web-based service that allows landlords to advertise their rental properties free of charge for which renters can also search free of charge.  The website has been a great way to connect landlords with Delawareans in order to find the home that’s right for them.  It was important to us to have a database of rental units available for individuals who may have unique needs.  Through DelawareHousingSearch.org, individuals can find housing from private market units to assisted housing units and narrow their search by a variety of criteria.

DSHA and its partners work continually to find more creative ways to help meet the affordable rental housing needs here in Delaware, and we recognize that there is much more that needs to be done.

Delaware State Housing Authority Offers Funding to Help Individuals Purchase Foreclosed or Abandoned Homes

By Anas Ben Addi, DSHA Director

It’s hard to avoid stories in the newspaper and on TV news reports about the housing crisis and the rising tide of foreclosures throughout the country.

Due to the economic downturn, many homeowners in Delaware are faced with the harsh prospect of foreclosure; sometimes for reasons out of their control, like loss of income, reduction in their work hours or an unplanned illness.  With the help of our partnership with the U.S. Department of Housing and Urban Development (HUD), DSHA is helping to stem this problem before it becomes a full blow crisis. We have been able to provide assistance through the Delaware Emergency Mortgage Assistance Program (DEMAP) along with other important assistance programs.

In addition to helping homeowners stay in their homes, our programs are also assuring that abandoned and foreclosed homes don’t fall into disrepair.

On November 21, we announced a new program that will help interested individuals purchase and refurbish foreclosed and abandoned homes in Delaware.

DSHA’s Rebuilding Our Communities Homebuyer Program (ROC) was created by the Authority to promote the purchase of homes in neighborhoods that have experienced high foreclosure rates in New Castle, Kent and Sussex Counties. We were able to create this program through funds allocated by the HUD Neighborhood Stabilization Program-3.

ROC is forgivable over a 10 year period pro-rated monthly, interest-free second mortgage that can be used for the purchase of foreclosed or abandoned single family housing in qualified census tracts. ROC loans provide eligible homebuyers with $15,000 towards down payment and closing costs and must be used in connection with a DSHA-financed primary mortgage. Presently, mortgage rates for loans with assistance are available at 4.50% with 0 points.

All borrowers will receive the full $15,000 loan. Any money from the loan available in excess of those customary closing costs and fees will be used to reduce the initial loan amount of the first mortgage loan.   

Here are other important facts about the ROC program:

  • This is a forgivable loan prorated after a 10-year period.
  • The maximum ROC loan amount is $15,000.
  • There is no required monthly payment.
  • All ROC loans are interest free (0%).
  • ROC loans are subject to a prorated repayment prior to maturity.
  • ROC is secured by a second mortgage recorded against the property.
  • Funds are applied first to down payment and closing costs and the balance to reduce the initial amount of the first mortgage.

Individuals who do not meet the qualification criteria for the ROC program may still meet the qualifications for our Second Mortgage Assistance Loan (SMAL) and are encouraged to apply. SMAL is also a DSHA program that provides loans to individuals for down payment and closing cost assistance up to $10,000. DSHA also offers unassisted first mortgage loans with rates as low as 3.5%.

This no interest loan can be used toward down payment and settlement costs and must be secured by a second lien position on the property. The SMAL can only be used with DSHA Single Family Mortgage Revenue Bond (SFMRB) Program loan as a first mortgage product.  All SFMRB compliance requirements apply to SMAL, so if your borrower qualifies for one of DSHA’s 1st mortgage programs, they are eligible for SMAL Borrowers using SMAL must participate in a HUD-approved housing counseling program/ homeownership education Borrowers using SMAL must also have the property inspected by an ASHI-Certified, NACHI-Delaware Chapter, or NAHI-CRI Home Inspector.

At the Delaware State Housing Authority, we’re working everyday with homeowners to help them to avoid foreclosure on their homes as well as individuals who want to purchase abandoned or foreclosed homes. We encourage individuals who are eligible for ROC or SMAL to contact us to learn more about how they can apply to these programs.

Please visit our website http://www.destatehousing.com/HomeOwnership/HomeOwnership.php for additional information on eligibility requirements.

Foreclosure Assistance is Available in Delaware

At the end of September, Governor Jack Markell signed a new bill into law that would require all homeowners and lenders in the State to go into mediation when foreclosure proceedings are filed by the lender. This bill along with the package of other housing bills signed into law by the Governor on September 21st will go a long way to helping to protect the rights of homeowners across our State and also to help stem the foreclosure crisis in Delaware.

At the Delaware State Housing Authority, we’ve worked since 2007 to help more than 325 families in Delaware to avoid foreclosure through our Delaware Emergency Mortgage Assistance Program (DEMAP). DEMAP provides Delaware homeowners who are more than 90 days delinquent on their mortgage and meet our income limits and hardship criteria – including a loss of 15 percent or more of their income from either loss of employment, reduction in hours or inability to work due to an injury or illness to themselves or an immediate family member who is the primary caregiver.

At DSHA, we’re working with a number of our partner counseling agencies in the State to help homeowners in foreclosure. These agencies include: Consumer Credit Counseling Service of Maryland and Delaware, Inc. (CCCS of MD & DE, Inc.); First State Community Action Agency; Hockessin Community Center; Housing Opportunities of Northern Delaware, Inc.; Interfaith Community Housing; National Council on Agricultural Life and Labor (NCALL) Research Fund; Neighborhood House, Inc.; and YWCA Centers for Homeownership Education.

Homeowners who receive DEMAP assistance can receive a maximum of $25,000 for 24 months in mortgage assistance from DSHA at three percent interest. There are no set monthly payments on the loan for the homeowner until the house is sold or refinanced, or the owner is able to make payments. There is no payment schedule for the loan, but three percent interest will accrue from inception of the loan to close of the loan.

You may have heard about the fact that earlier this year, our State was among the many in the country who received federal funding to provide mortgage assistance to struggling homeowners from the United States Department of Housing and Urban Development’s (HUD) Emergency Homeowners’ Loan Program (EHLP). While this funding ended on September 30th, eligible Delaware homeowners will still be able to obtain mortgage assistance through the Authority and its counseling agencies partners through our DEMAP program. From April 18 to September 30, DSHA used HUD funding to provide more than $4 million in mortgage assistance to nearly 100 families in Delaware.

Delaware was one of the few states that received federal funding from HUD through its EHLP program because of the past successes of DEMAP. Since 2007, DEMAP has been funded through fees paid by financial institutions who operate in the State of Delaware.

I encourage residents who are experiencing foreclosure and in need of mortgage assistance to call one of these counseling agencies or visit our website at: www.destatehousing.com to see if they are eligible for mortgage assistance.

– Anas Ben Addi
  Director, DSHA


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