Missouri Mortgage Financing Help Offered to Lower-Income Buyers
This state might follow Ohio’s lead in offering more attractive financing to homeowners struggling with monthly Missouri mortgage payments.
A decision by the Missouri Housing Development Commission isn’t likely until this summer, but its staff is studying a plan to sell state-backed bonds to provide fixed-rate mortgages. Earlier this month, Ohio became the first state to launch such a program.
“We’re going to watch and see how they handle it,” said Don Brinker, homeownership manager at the commission, based in Kansas City.
From 2005 to 2006, foreclosure filings in the Missouri housing market doubled, from about 8,000 to about 16,000, said Chris Krehmeyer, executive director of Beyond Housing, a St. Louis nonprofit that advises low-income clients about homeownership.
Ohio, which saw its foreclosure rate rise 24 percent during the same period, is offering at-risk homeowners 30-year home loans with a fixed rate of 6.75 percent. That’s much lower than the 10 percent or more being paid by some homeowners after their lower-interest introductory periods end.
Ohio plans to finance about 1,000 loans by issuing $100 million in taxable municipal bonds. To qualify, home mortgage loan borrowers can’t have a household income that exceeds 125 percent of their county’s median gross income.
In Missouri, limits under consideration include an annual household income no higher than about $80,000 and a home purchase price of $237,000 or less.
Foreclosures in the St. Louis housing market rose 35 percent, from 2,094 in 2005 to 2,835 last year, according to the St. Louis County Planning Department. In St. Louis city, they rose 28 percent during the same period, from 1,338 to 1,708, Krehmeyer said.
Krehmeyer said studies have shown that residential foreclosures and mortgage defaults drag down the property values of other homes within one-eighth of a mile.
Beyond Housing advises homeowners at risk of foreclosure to call the toll-free number (888)-995-4673 for counseling.