Program to increase homeownership

Lafayette-Oxford-University (LOU) HOME could help those below the income median and in need of a home purchase a $125,000 home for $75,000.

“LOU HOME is about building a better community through homeownership,” Fred Laurenzo, president of the LOU HOME board of directors, said. “We think homeowners make better citizens.”

Tuesday night, LOU HOME held a public hearing about a grant the volunteer-led organization is pursuing from the Mississippi Development Authority, which received $15 million this year to allocate to communities for housing projects.

Laurenzo, one of the non-profit’s founders, said there is a significant portion of people in Oxford who cannot afford housing at the market rate.

“There is a group of people who cannot afford one aspect of the American dream, which is homeownership,” Laurenzo said. ”Our mission is to build a bridge between the market and the population that can not afford single family housing in the market.”

If LOU HOME receives the grant, up to four 1,400 square feet houses on Victory Hill Lane in Community Green would be offered at a mortgage rate of approximately $600 a month, which includes the loan, an approximate 5 percent interest rate, taxes and insurance, with 30 years on it. Laurenzo said the loan could be paid off early, or they could negotiate for a 15 or 20-year or whatever mortgage they choose.

At the 30-year rate, they would ultimately end up paying $216,000, $112,500 of which is interest at the advertised 5 percent rate.

Jason Lowe, a mortgage specialist at Regions Bank, said if they bought now, that rate would be even cheaper.

“The 30-year date for (Wednesday) would be 4.25 percent,” Lowe said. “The 15-year rate would be 3.75 percent.”

To be eligible, one would have to sign a contract that guarantees they will stay in the home long-term. If they break the contract before 10 years is up, they would have to pay back the grant. Laurenzo said every year, the number they would have to pay back steps down, and on the tenth year the grant is forgiven.

“For example, if you sold the house in the 12th year of home ownership, you would owe nothing on the grant,” Laurenzo said.

There are four qualifiers for the program.

The household income must be 80 percent of the Lafayette County median income, which operates on a sliding scale. For a family of four, the income cannot be greater than $45,050 a year. For a family of two, the income must be $36,050 or below a year.

A person must have not owned a home in the last three years, and he or she must pass a homebuyer’s education course.

Laurenzo said another thing an applicant would need is a credit score of approximately 620.

“If your credit is not up to snuff, we are hoping you will get into credit counseling,” Laurenzo said. “Some people have dings on their credit history that could be removed quickly with counseling.”

Amos Homebuyers Institute Director Janice Carr said the best way to clean up one’s credit is to enter a counseling program.

“I know some of you lie awake late at night watching TV and you hear people tell you they can clean up your credit for a fee,” Carr said. “No one can clean up your credit but you, however, and you’d be surprised that it isn’t as difficult as you think.”

The classes are offered Wednesdays from 9 a.m. to 2 p.m. For more information about credit counseling, and to enroll in Carr’s free program, contact her at 662-380-0662.

Once those four houses sell, LOU HOME’s plan is to build three more houses in Community Green.

Laurenzo said LOU HOME is truly a community effort.

“Affordable housing is a community problem, and the only way to solve a community problem is with community support,” he said.

The University of Mississippi donated 26 homes to the project, and the City of Oxford donated Community Green’s land. A group of banks loaned LOU HOME the capital to move the homes to the lots.

“These houses were moved from the campus, and we put all new electrical wiring, all new plumbing, all new windows, a new roof, and redid all of the surfaces in the interior,” Laurenzo said.

The grant is being submitted on Sept. 29, and LOU HOME is accepting comments and suggestions from the public until Sept. 22. To make a suggestion, drop off a letter at the Oxford Housing Authority’s office.