Council okays buyer assistance program; endorses new resale inspection rule

Council okays buyer assistance program; endorses new resale inspection rule


Written by News Staff

Monday, February 8, 2010

NEWMAN - Housing-related issues were at the forefront last week for the Newman City Council, which took actions that will make it easier for some residents to buy a home of their own and would add an inspection requirement for those attempting to sell theirs.

The council gave its approval to a proposed first-time home buyer assistance program which offers up to $40,000 in assistance to qualifying buyers.

Council members also introduced an ordinance requiring city inspections for potential code violations on any homes being resold.

Assistant Planner Stephanie Ocasio said the city has more than a quarter-million dollars available through the Home Investment in Affordable Housing Program to help income-eligible buyers become homeowners.

“It seems like a lot of folks have become interested in purchasing a home, and they have become affordable again,” Ocasio noted. “This is a great tool to help first-time home buyers.”

A family of four can have an annual household income of up to $47,700 and qualify for the program.

Buyers must have good credit, be pre-qualified with a primary lender and have some cash of their own to put toward the purchase, either 3 percent of the sales price or $3,000, whichever is greater.

Buyers must live in the home being purchased with the financial assistance, which can be as much as 20 percent of the sales price up to $40,000.

“Someone could potentially buy a $200,000 home and have a 20 percent down payment through this program,” Ocasio noted. “The loan is deferred for 10 years, in which time buyers are typically earning more money (and can better afford the repayment).”

The loans will allow buyers to avoid mortgage insurance, and they do not count against the borrower’s debt ratio, she added.

Past home buyer assistance programs have been successful, Ocasio said, and she expects the same from the latest program.

“I think it will help provide opportunities to get people into homes,” she reflected.

Home inspection requirement

Council members last week also took the first step toward requiring that resale homes are inspected for code violations as part of the transaction process.

Ocasio said the new ordinance would require exterior inspections of homes for violations such as work done without a permit and setback or lot coverage violations.

The inspection would give buyers assurances that they were not buying a home with existing code violations (or the knowledge that they were), she remarked, while giving the city a tool to identify and correct violations.

“A lot of people have bought a home not knowing something is illegal,” Ocasio explained. “This way they can make an informed decision. If they decide to inherit a violation, it also lets them know that we are aware of it and will be contacting them to bring it into compliance.”

A violation cannot stop a real estate transaction, she noted.

Once identified, though, the city will ensure violations are corrected - either by the buyer or the seller.

“This would be a great tool,” declared council member Ted Kelly. “Anyone buying a home in Newman is protected.”

The seller would be responsible for the $120 fee.

Ocasio said the city will attempt to educate real estate professionals about the requirement. Sellers who fail to comply with the inspection requirement face a possible administrative citation and penalty which has yet to be determined.

Some transactions - such as the transfer of property among immediate family - are exempt.

The council will consider final adoption at its Feb. 9 meeting.

Towing ordinance

Council members last week formally approved an ordinance which establishes a number of guidelines for companies providing police tow services.

One of the primary requirements is that companies on the police department’s towing rotation have a staffed yard in the city of Newman.