Officials with the City of Atlanta recently expressed concerns that foreclosures and more stringent lending requirements may cause a decline in the city's home ownership rate, which was estimated to be 50 percent in U.S. Census data from 2007.
Recognizing that two of the biggest obstacles to home ownership are household income and the ability to make a downpayment, the Atlanta Development Authority (ADA) is ramping up its mortgage assistance programs and pursuing federal dollars in order to expand its program.
Through its HOME Atlanta program, the ADA has provided downpayment assistance to nearly 400 families since 2007. The ADA reports that its housing finance department closes eight to ten loans per week as prospective buyers scramble to take advantage of the deflated real estate market and the $8,000 federal tax credit for first-time homebuyers. The deadline for the tax credit was recently extended until April 30, 2010.
ADA targets its programs to middle-income working families. The average family income among program participants is $46,500, and the average purchase price of homes that have closed is $161,200. Participants are buying single family detached houses, as well as townhomes and condos.
What makes a $161,000 home affordable to someone earning just $46,000? The homebuyer can take out a smaller loan since the development authority is subsidizing the downpayment. This reduces their monthly payment to somewhere around 35 percent of their income and allows them to qualify for a conventional 30-year, fixed rate mortgage.
Based on an analysis of where the homes are located, the most popular neighborhoods are Greenbriar/Campbellton Road (NPU R), those around Lakewood Amphitheater, Downtown/Old Fourth Ward (NPU M), South Atlanta/Amal Heights (NPU Y), and the historic neighborhoods around Turner Field (NPU V). The kinds of jobs the buyers have are what one might expect; teachers, healthcare workers, government workers and retail/hotel/restaurant managers. Unfortunately, only one percent of the 400 closings have included law enforcement officers. ADA would like to see more police officers and firefighters participate in the program going forward and is working with the Atlanta Police Foundation to help increase awareness.