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On October 12, 2011, my husband and I signed two hours’ worth of paperwork and forked over a $2450 earnest-money deposit on a four-bedroom, four-bath townhome in Chula Vista.

For years, we’d fantasized about escaping the constraints of our 860-square-foot, $1300-a-month condo rental in City Heights. Now, our three-year-old daughter would be able to move out of our closet (yes, our closet) and into her own room, and our cologne-obsessed 13-year-old would have his own lair, two floors down from the other bedrooms. Along with 1850 glorious square feet and extra bathrooms, we’d have canyon views and a two-car garage that led into the house: no more lugging groceries in the rain. And — oh, yeah — mortgage and property tax combined would add up to $1147 (not including HOA fees), $153 less than our rental.

In the parking lot outside the real-estate agent’s office, I sent a text blast to family and friends: “It’s ours. We’re in escrow!”

My husband sighed. “It’s not ours yet, Lizzie. Anything can happen between now and the time we close.”

I dismissed the comment with a wave of my hand. Despite his previously discouraging experiences with sellers (one deal fell apart the day escrow was due to close), my optimism would remain intact. I’d heard about the hassles of purchasing a home through first-time-homebuyer incentive programs, but this place was meant to be ours, and I believed that everything would go swimmingly.

Twenty days later, our listing agent Joe sent us a Notice of Termination.

I panicked, let loose a string of profanities, and went into fight mode.

Our agent later told me that, for a 60-day escrow like ours, 20 days wasn’t too terribly deep into the process. But we’d been at this longer than the length of the escrow, and the future of our down-payment assistance was uncertain. We were relying on it to help with the purchase, and I feared we might not get another chance.

∗ ∗ ∗

In late 2008, during an online search for first-time homebuyer programs in San Diego, my husband (hereafter referred to as “M”) located an organization called Community Housing Works. The “About Us” page on the website boasted: “Our coaching, realty and innovative loan funds have created approximately 100 new homebuyers across the county every year.” The “Lending” page offered “an array of Down-Payment Assistant loans that may help you purchase your first home!”

In order to take advantage of these loan programs, one or both of us would have to participate in an eight-hour, HUD-approved first-time-homebuyer education course. So, early one Saturday morning in January 2009, two weeks after the birth of our daughter, off M went to the Price Charities building on University Avenue.

Elizabeth Salaam and her husband

He came home tired, carrying a stack of program details and checklists for potential borrowers. M felt that unless his work picked up significantly, we would probably not qualify for a loan.

The good news was that when we were ready, there was money out there. Maybe as much as $70,000, if we bought a house in City Heights. If we wanted to look as far from the city center as Chula Vista (we didn’t), the number might go as high as $100,000. And, said M, his participation in the course wouldn’t expire.

At the time, exhausted from mothering a newborn, I let M take the lead. But later I would learn that, along with providing education classes and financial counseling, Community Housing Works offers a Cal-Home loan, funded by the State of California (through bond funds) and intended for first-time homebuyers from “low to moderate income” households. The organization also underwrites and administers down-payment-assistance loans offered by the cities of Carlsbad, Chula Vista, National City, and Santee.

Dee Sodano, vice president of lending at Community Housing Works, estimates that, in 2011, the organization provided loans to approximately 70 people.

“We’re not a big bank,” Sodano says. “I used to work for a big bank, funding $34–$40 million a month. But here we’re way less. If we fund $2 million a month, that’s huge.”

The lending department at Community Housing Works also provides first mortgage loans to qualified homebuyers. Some are Community Reinvestment Act (CRA) loans, which Sodano explains as the “affirmative action” of the housing world. They allow for a competitive interest rate, and, in some cases, no mortgage insurance — even if the home buyer doesn’t have a down payment of 20 percent.

“A lot of banks with lending programs are required by the federal government to do a certain amount of lending in low-to-moderate-income areas, and to minorities,” Sodano says. “You can’t redline anymore — they used to call it redlining. You can’t pick and choose your borrowers. They’ve had to force some of the banks…[via] the Community Reinvestment Act. What some banks choose to do — not all of them — is to roll out programs” specifically designed for these populations.

Rather than seek out borrowers who fit the bill, banks provide these programs to Community Housing Works and other nonprofit organizations that have already established themselves as resources in the community.

To those who criticize the programs, Sodano says, “It’s a loan. It’s not welfare. It’s a helping hand, not a handout.”

She emphasizes that strict minimum and maximum debt-to-income ratio requirements are intended to qualify potential homebuyers and to avoid subsidizing those who don’t actually need the help.

∗ ∗ ∗

In early 2009, those maximum debt-to-income ratios looked like they’d keep our family on the books as renters for another few months. The holidays were a slow time at the shipping company where M worked as a truck driver. He spent more days at home. With a brand-new baby, my income was uncertain. But, as we did every January, we anticipated that M’s hours would pick up soon.

They did not.

“Date night” became Sunday-afternoon walks through North Park, South Park, and Hillcrest, fantasizing about home ownership. It was another year and a half before my husband landed the steady, full-time income that would, along with my freelance writing gigs, deem us loan-worthy at last.

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Comments

ImJustABill March 22, 2012 @ 9:36 a.m.

The current recession is largely due to the bursting of the housing and mortgage bubble. Yet, amazingly, the key root causes of the mortgage and housing bubble 1) Lax regulations on Wall Street 2) Excessively low Fed interest rates 3) Numerous gov't programs pushing banks to make loans to less qualified borrowers than the banks originally wanted to - continue full steam ahead.

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historymatters March 22, 2012 @ 11:19 p.m.

this feels like a PR piece for Community Housing Works. Those guys have built some of the worst buildings in the whole city. They are as corrupt as can be. I dont like how this piece keeps insisting its not a nahd-out, its a loan.....That is not true. If the loan is being subsidized by tax dollars which it is then it is a handout! We should be asking in a city and a state that is bankrupt why are we choosing to spend what little money we have bribing people to buy real estate?

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historymatters March 22, 2012 @ 11:23 p.m.

the truth of the matter is San Diego is just finding more creative ways to subsidize the building industry that runs this town so they are using our tax dollars that should be fixing our streets to bribe people to buy the glut. I really hate it when this corporate building industry maffia tries to hide under the umbrella of helping the poor. There is absolutely no help for renters. There is an 8 yr waiting list to get assistance to pay your rent but if you will buy a house we will give you $70k interest free.

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historymatters March 22, 2012 @ 11:33 p.m.

Its high time to round these criminals up. politicians like Toni Atkins who declared the Federal Housing Emergency and helped create the glut have been profiting from low income housing projects for years. Community Housing Works and other "non-profits" will create projects as Delaware LLcs which allows them to make politicians investors in projects they vote on. In other words these groups propogate legal bribary and money laundering all under the umbrella of "helping the poor". thats why there is this sudden motivation to help the homeless especially since LeSar, Atkins partner was paid 1/2 a million dollars to count homeless people and come up w/ a "plan". No doubt a plan that will help her private clients and her wife become millionaires w/ your tax dollars.

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Javajoe25 March 23, 2012 @ 11:55 p.m.

History,

What in God's name are you talking about? These programs are designed to help people who might never get into a house, get into one. That is exactly what your (and my) tax dollars should be doing. Don't forget, once these folks get into a house, they will become tax payers like never before. I think all your ranting about these tax program giveaways, is just a load of crap because you are another one of those cheapskates who do not want to pay any taxes for anything, anytime! And it is morons like you who have lead this city and this country down the tubes to the point we are second rate to countries we once rescued. All this baloney about paying high taxes is nothing but greed complaining about what needs to be paid in order to make this society better than it is.

I am so tired of hearing from people like you, whining about where your tax money is going when the fact is, you and others like you do not hesitate one second when it comes to taking advantage of government programs that add money in your pocket, or fudging on your tax returns to cheat the country in any way you can.

Why don't you just move to someplace else; someplace where no one cares about the infrastructure of the country crumbling; someplace that could care less about who is starving on the street, or dying from lack of medical care. Maybe some nice third-world country where nothing is done; no improvements made; and conditions are worse now than they were 20 years ago. That seems to be the kind of country you want. That is not what many of us want here. Not the good people who provide these programs, and not the people who administer them, and not the people who thankfully, are able to take advantage of them and make this place a better place for all of us.

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M. E. March 24, 2012 @ 1:14 a.m.

JavaJoe,

Your point would have been better made if you had thrown in a few semicolons at the end for no reason.

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Javajoe25 March 24, 2012 @ 11:08 a.m.

I have found a direct correlation between the number of semicolons I use and the number of shots of tequila I've had. Now, with vodka, I go more with the dashes; gin yields run-on sentences; and the demon rum just results in lots of profanity. I think scotch produces my finest writing. Weed: a lot of what I call "circular thinking."

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ImJustABill March 24, 2012 @ 6:33 p.m.

Javajoe,

I don't know if it was the tequila talking or if you really are so intolerant that you truly want anyone with opinions different from yours to leave the country.

But clearly History has some vaild points - many of these programs have had a certain amount of graft. This doesn't help anyone except certain well-connected insiders and crooks.

Sorry, I'm with history. I don't want my tax dollars going to programs that result in complex bureaucracies which resdistribute those dollars by a complex set of rules that ends up enriching a few well-connected crooks.

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Javajoe25 March 24, 2012 @ 7:13 p.m.

Bill,

I don't want people with opinions different from mine to leave the country; just those who complain about paying taxes for programs designed to help others. Yes, some money gets eaten up by the bureaucracy, but much more ends up doing exactly what it was intended to do. I just don't like people who promote a dog eat dog society. I believe we can be so much more than that, and can easily afford it. We just need to get our priorities straight and reign in the waste on such things as Iraq and Afghanistan; eliminate the mortgage interest deduction; and have the rich pay their fair share of taxes.

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nan shartel March 25, 2012 @ 11:56 a.m.

so wait a minute now

are you saying that after nearly 2 years of jumping thru unbelievable hoop you got a house 4 $105,000 4 now???

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NatePoole March 27, 2012 @ 2:37 a.m.

Some of you are so intent on projecting your particular brands of partisan preconceptions and rancor onto Ms. Salaam's experience that I think you may have missed entireIy the point of this story. This couple is not just living the American dream; they ARE the American dream.

Is our system perfect? Of course not, and it never will be. But despite the absurd bureaucratic hoops through which this couple had to jump, they succeeded. And they succeeded through individual responsibility, perseverance, and a remarkable amount of patience.

Greed? Please. We're all greedy, every one of us. And too many Americans from every point on the economic spectrum are guilty of economic irresponsibility that rises to the level of immorality. This couple saved a $30,000 down payment on what sounds like a pretty tight budget. Who does that anymore? How many of us bought houses with 110% financing during the boom? And now we're surprised to be upside-down? No, worse, we see ourselves as victims because we're upside-down.

This article is inspiring and should not be fodder for political bickering. If every one of us were as responsible as Ms. Salaam and M, there would be no mortgage crisis. More importantly, there would be no need for politicians and bureaucrats to protect us from ourselves.

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dthatcher March 28, 2012 @ 9:51 a.m.

I do agree that this sounds a bit like a PR piece for Community Housing Works. Just know that CHW is not the only way to go for these types of loans. The type of loan being discussed in this article is a CRA mortgage. I spoke with a loan officer at my bank who is putting me in touch with the person at my bank who handles CRA mortgages. I would venture to say that many major lenders will help you with a CRA loan if you ask. Otherwise, they may default to steering you into an FHA loan which doesn't offer as many perks. No matter who you get a CRA loan through, you have to take the class. CHW charges $60 for the class, which can be reduced to $40 if you qualify for the reduction. I would venture to guess that no matter who you go through for a CRA loan, you will have to pay some nominal fee for the class, but I don't know yet. Also be aware that one of the worst things you can do is go through the same person for everything: loan, agent, inspection, etc. Most real estate agents are willing to help handle everything from pre-qualification to closing if you let them, but it's not a good choice. Find the best people for each job.

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