PUTTING GOVERNMENT PROGRAMS TO WORK [OR YOU

PUTTING GOVERNMENT PROGRAMS TO WORK FOR YOU

This section is to make you more aware of the role that the federal, state, and local government can play in your real estate investing. Many cities and towns have real estate related programs that can assist you. Today, all 50 states have housing programs of one kind or another. Every state has a minimum of four housing programs and some, like California and Wisconsin, have up to 25 such programs.

This should come as no surprise because affordable housing has long held an important place in both state and federal government agendas. New programs and agencies are constantly being created to meet the various housing needs of the American people.

HOUSING PROGRAMS THAT REALLY HELP

Take a moment and look at the following list of state administered programs, and see if you can find yourself among the group the program was designed to benefit.

· First-time homebuyer

· Lower or moderate-income home buyer

· Disabled or handicapped person

· Minority

· Woman

· American Indian

· Property with an environmental hazard

· Elderly

· Delinquent on mortgage payments

· Want to build own-cost rental units

· Neighborhood needs revitalization

· Migrant farm worker

· Live in a mobile home rental park

· Want to make home more energy efficient

· Live in home with dysfunctional plumbing Live in property with lead paint

· Would like to own a family farm

If you cannot find yourself some place on that list, you may not be breathing. The question then becomes, how do you plug into these various programs? It would be an enormous task (and soon outdated) to try to list every single agency in every state. But, with a little effort on your part, it will be a simple task to locate all the agencies and programs in your state in which you might participate.

RESEARCH

Go to your local telephone company office or library and look through a telephone directory for your state capitol. Call the office of your local state senator or representative, and ask if they can provide you with the names and addresses of the various housing-related agencies. Look at your local telephone directory for any agency that has the word "housing" or mortgage' as part of its name. Contact the Human Services Department of your county government to determine the local programs for which you qualify and which will be beneficial.

As you do this research, obtain information about every program available which relates to real estate that might assist you personally or professionally in your role as a real estate investor. These agencies will be pleased at your interest. They want you to take advantage of their resources. You pay for these programs, so it is about time to recycle some of your tax money.

Every year, hundreds of millions of dollars in budgeted expenditures go unclaimed, primarily because people do not know about these programs or are too lazy to do some basic research. Even so, the government provides assistance in an amount equaling approximately $500 billion per year. The assistance takes many forms: loans with or without interest, loan guarantees for loans made through private lenders, grants that do not require repayment, specified or unrestricted-use direct payments to individuals, and finally. Insurance designed to assure reimbursement for any losses sustained.

Be aware that Government programs are constantly changing. Some are eliminated while new ones are being added. While a given program may be technically active, from a practical standpoint, it may be inactive because of lack of funding by Congress.

FEDERAL GOVERNMENT PROGRAMS

Some of the federal government programs that would be most applicable to your real estate investing are shown below along with the name of the office in Washington, D.C. that administers the program. Following that is a brief description of each program.

Rehabilitation Mortgage Insurance 203(k)

(Department of Housing and Urban Development)

A federal loan guarantee for private loans made to help families repair or improve, purchase and improve, or refinance and improve existing residential structures more than one year old.

Mortgage Insurance: Construction Or Substantial Rehabilitation of Condominium Projects 234(d)

(Department of Housing and Urban Development)

A federal loan guarantee for private loans made to developers to develop condominium projects or to rehabilitate condominiums in which individual units will be sold to homebuyers.

Mortgage Insurance: Homes 203(b)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans made to help families undertake home ownership.

Mortgage Insurance: Homes For Low And Moderate Income Families 221 (d)(ii)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans made to individuals who are displaced by a natural disaster, urban renewal, or other government actions designed to increase home ownership opportunities for low and moderate-income families.

Mortgage Insurance: Homes In Urban Renewal Areas

(Department of Housing and Urban Development)

To help families purchase or rehabilitate homes in urban renewal

areas through a government loan guarantee of private loans.

Mortgage Insurance: Manufactured Home Parks 207(m)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans to make possible the financing of construction or rehabilitation of manufactured home parks.

Mortgage Insurance: Purchase Of Units In Condominiums 234(c)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans to individuals to purchase units in condominium projects.

Mortgage Insurance: Rental Housing (207)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans to provide good quality rental housing for middle-income families.

Mortgage Insurance: Rental Housing For Moderate Income Families And The Elderly 221(d)(iii) And (iv)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans made to provide good quality rental or cooperative housing for moderate-income families and the elderly.

Mortgage Insurance: Rental Housing For The Elderly (231)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans made to provide good quality rental housing for the elderly.

Mortgage Insurance: Rental Housing In Urban Renewal Areas 220 (Multi-Family)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans made to provide good quality rental housing in urban renewal areas, code enforcement areas, and other areas designated for overall revitalization.

Supplemental Loan Insurance: Multi-Family Rental Housing

(Department of Housing and Urban Development)

A federal loan guarantee of private loans to finance repairs. additions, and improvements to multi-family projects, group practice facilities, hospitals, or nursing homes already insured by H.U.D.

Mortgage Insurance For The Purchase Or Refinancing Of Existing Multi-Family Housing Projects 223(f)

(Department of Housing and Urban Development)

A federal loan guarantee of private loans made for the purchase or refinancing of existing multi-family housing projects, whether conventionally financed or subject to a federally insured mortgage.

Housing For The Elderly Or Handicapped (202)

(Department of Housing and Urban Development)

A direct loan made to provide for rental or cooperative housing and related facilities (such as central dining) for the elderly or handicapped.

Community Development Block Grants/Entitlement Grants

(Community Planning and Development Office of Block Grant Assistance)

Grants to develop viable urban communities by providing decent housing in a suitable living environment.

Community Development Block Grants/Small Cities Program

(Community Planning and Development Office of Block Grant Assistance)

Grants to encourage the development of viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities in small cities.

Section Eight: Low Income Rental Assistance

(Department of Housing and Urban Development)

Direct payments made to landlords to provide partial housing payment for low income families.

In addition to state and federal programs, there are also local community programs, many of which are funded with state and federal assistance. Any time you spend in researching these programs would be well invested.