After years of advocacy and planning, the Allston Brighton and FenwayCommunity Development Corporations (CDCs) have opened the doors to affordablehome ownership in two Boston neighborhoods hit hard by 1980’s condominiumspeculation. As part of a program called HouseBoston, a collaboration amongthe City of Boston, Fannie Mae (the Federal National Mortgage Association)and a group of local lending institutions, Calling the Fenway Home and CallingAllston Brighton Home provide education and counseling to first-time homebuyers.The goal is improving their access to financing and their capacity to makeinformed choices as well as providing technical assistance to condominiumassociations to build their financial and physical strength and to increasetheir accessibility to new owner occupants.
The Allston Brighton and the Fenway neighborhoods were selected for thispilot program because the CDCs demonstrated that though the areas were hithardest by the collapse of the condominium market in the late 1980’s, manyof the condominiums remain in excellent condition. Furthermore, condominiumprices appeared affordable, but were inaccessible to moderate-income peoplebecause of high down payment requirements to compensate for low owner occupancyrates that did not meet secondary market standards. Fannie Mae respondedto the CDCs by introducing two new mortgage products as part of HouseBoston,the Boston Mortgage and Fannie Neighbors, which enable owner occupants topurchase condos with 3%5% down payments in associations with lowerowner occupancy rates. Fannie Mae revised guidelines for the approval offinancing to condominium associations, permitting them to be approved with25% owner occupancy rates, instead of the standard 60%. The associationmust also demonstrate in other ways that it is healthy and stable. Theseguidelines and mortgages lay the foundation for the Calling Allston Brighton/Callingthe Fenway Home projects
Homebuyer education is essential to the success of Calling the Fenway/CallingAllston Brighton Home. Homebuying 101 is a free 1 hour class which takesplace over the course of four to five weeks. Participants are presentedwith unbiased information aimed at helping them to become well informedhome and mortgage shoppers and responsible homeowners. Class topics includewhat the bank looks for when securing a mortgage, budgeting and debt, credit,finding the home you want, the Offer to Purchase document, the componentsof the Purchase and Sale agreement, legal aspects of the closing, selectinga mortgage, and the responsibilities of Homeownership. The material coveredin the class is similar to that of other homebuyer classes and can applyto any form of homeownership. At the Allston Brighton and Fenway, however,classes contain information specific to the condominium purchase experience,including the unique aspect of obtaining financing and the payment of condominiumfees, as well as insight into the Fenway and Allston Brighton condominiummarkets not normally revealed by real estate brokers representing sellers.Each Homebuying 101 class is co-sponsored with a HouseBoston participatinglender who is an active participant in the course, making him or her selfavailable during the course to answer questions and address concerns. Followinggraduation, Homebuying 101 participants receive free homebuying counselingat the sponsoring CDC, making use of Fannie Mae’s Desktop Home Counselorsoftware. This session includes an optional review of a current credit reportand a discussion of which mortgage product is most appropriate for the homebuyer.
Homebuying 101 is approved for the Massachusetts Housing Finance Agency(MHFA) Homebuyer Counseling program and the City of Boston’s Boston HOMEcertificate program, which provides a $500- $1000 closing cost discountto income eligible graduates. The full $1000 will be available to condotenants who buy a unit in the development where they rent. Participantsalso have free access to neighborhood condo listings notebooks, a compilationof local condo listings, recent sales data, and lists of bank owned andforeclosed properties. Nine sessions of Homebuying 101 will be held at eachCDC in 1996, including classes offered in Russian, Portuguese, and Vietnamese.
Calling the Fenway and Calling Allston Brighton Home are working closelywith a number of financial institutions to move foreclosed properties intothe hands of owner occupiers, through CHAPA (Citizens Housing and PlanningAssociation). In addition, units foreclosed by the FDIC, RTC, Fannie Maeand Freddie Mac (Federal Home Mortgage Corporation) are being marketed toarea residents. In collaboration with the FDIC, early fall auctions willfeature the sales of over 100 units in the two neighborhoods that will beamong the most affordable available in the area. Many people will have theopportunity to buy a home in this process while moving several condominiumassociations from a position of weakness to a position of greater strength.
In short, Calling Allston Brighton and Calling the Fenway Home createthe links and the supports necessary to connect informed and responsiblecondominium buyers of all income levels with stable properties whose trusteesare committed to improving the health of their association.
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