The Korea Daily US Newspaper Articles

 

Half of Korean-American applicants for first-time home purchase assistance are rejected – 2024-12-27

Programs supporting first-time homebuyers have expanded, but many Korean Americans fail to benefit due to insufficient preparation.

The Shalom Center (Director Jee R Lee), which facilitates these programs, reported that over the past year (starting October of last year), 440 homebuyers received support through state and city government housing assistance programs.

The total amount of support reached $2.176 billion. Among the beneficiaries were 166 White applicants, 135 Asian applicants, and 63 Black applicants. Of the 135 Asian beneficiaries, 130 were Korean.

Although Koreans accounted for about 30% of the total beneficiaries, this proportion is relatively low considering that the Shalom Center is a Korean-American organization. Despite many applicants, the approval rate for Korean Americans remains low.

According to the Shalom Center, one out of every two Korean-American applicants fails to qualify due to issues such as improper income tax filing, poor debt management, and low credit scores.

Director Jee R Lee noted, “In many cases, applicants underreport their income, making it appear insufficient to maintain the home after receiving government assistance.” He added, “In addition to income, a high debt-to-income ratio (DTI) is also problematic. It is very important to ensure that monthly expenses do not exceed 45% of income.”

The Shalom Center facilitates several major housing assistance programs in the LA area, including:
-Dreams for All: Down payment assistance for first-time homebuyers.
-LIPA/MIPA: LA City programs for low- and middle-income down payment support.
-HOP: LA County’s housing assistance program.
-Wish Grant: Down payment matching programs for first-time homebuyers.
-CalHome: A grant program from the California state government.

Director Lee explained, “The LIPA program provided by the LA Housing Department supported $161,000 for 15 households on January 8 and March 12, respectively. By combining $100,000 in CalHome grants with the $161,000 in assistance, the beneficiary can buy a house.”

He emphasized, “Depending on the area, buyers can receive an additional $50,000 through grants and $30,000 through the Wish Grant, allowing for a maximum of $341,000 in total assistance.”

The center also noted a growing demand for manufactured homes among prospective buyers seeking affordable options. In densely populated areas like LA, where land is scarce, such homes are primarily available in outer regions such as Riverside and Imperial counties. These homes are priced between $400,000 and $500,000, offering affordability and reduced buyer burdens with down payment assistance.

Director Lee added, “It’s not widely known, but even first-time homebuyers with higher incomes can receive government housing assistance. Programs like CRA (Community Reinvestment Act) and CNB (City National Bank) are prime examples.”

The CRA (Community Reinvestment Act) program provides up to $15,000 in assistance for individuals with high incomes who face difficulties preparing a down payment, have low credit scores, and carry significant debt. The CNB (City National Bank) program offers up to $50,000 in support.

Director Lee emphasized, “Government housing assistance programs are diverse, and prospective buyers can secure substantial support by strategically aligning their financial situation with the appropriate program. Combining income with parents and purchasing a home under joint ownership is also an effective strategy.”

 

 

Jee Lee of Shalom Center to be honored by NHSLA with Unsung Hero Award – 2024-09-06

Jee Lee, President of Shalom Center will receive the Unsung Hero award for his efforts and achievements in addressing low-income housing.

On September 4, Neighborhood Housing Services of Los Angeles County (NHSLA), the operator of low-income housing assistance programs, announced the schedule for its 40th anniversary gala. The event, which will take place at Paramount Pictures Studios on September 13, will include a concert and dinner.

Lee will be honored with the Unsung Hero award, which was created to commemorate NHS’s 40th anniversary. The organization said three individuals were selected for their work in addressing low-income housing. Notably, Lee is the first Korean-American to be honored.

The Shalom Center and NHSLA have a long history of collaboration on projects such as preventing evictions and providing funds to repair homes that burned down in wildfires.

“There is no greater joy than to be recognized by the people you have worked with for the good of the community,” said Lee, ”and it is especially meaningful to be the first Korean American to receive this honor.”

 

 

 

 

 

 

0% down payment mortgage returns to market as home prices hit record high – 2024-06-04

With home prices at record highs and down payment burdens skyrocketing, no-down payment mortgages have made a comeback.

“There is currently no other lender or non-bank mortgage company offering a 0% down purchase program nationwide,” said Alex Elezaj, chief strategy officer at United Wholesale Mortgage (UWM), which launched the no-down payment mortgage. “And we’ve already received thousands of applications in the two weeks since launch.”

However, some have raised concerns that this could lead to a repeat of the subprime mortgage crisis and defaults. The Korea Daily spoke with a Korean-American real estate and mortgage expert to learn more about the pros and cons of the program.

 

What is the background for the launch of a 0% down payment mortgage?

As home prices and mortgage rates have risen steeply since the pandemic, so have down payments. According to a recent report from Realtor.com, the down payment ratio increased from 10.7% of the purchase price in the first quarter of 2020 to 13.6% in the first quarter of this year.

As the proportion of down payment has increased, the financial burden for homebuyers has become more challenging, leading to the introduction of no-down payment options.

UWM’s 0% down payment mortgage program

To qualify, one of the borrowers must be a first-time homebuyer and earn 80% or less of the area median income (AMI).

Qualified homebuyers receive 97% of the home’s value as a first mortgage from a UWM lender. The remaining 3%, or up to $15,000, can be borrowed as a second mortgage. The second mortgage is interest-free but must be paid in full upon selling the home, paying off the mortgage, or refinancing.

Pros and cons

The main advantage is that you can buy a home without having to come up with tens to hundreds of thousands of dollars for a down payment.

However, the downside is that if you borrow 97% of the value of your home at a 7% mortgage interest rate, you’re looking at a hefty monthly payment. This means that you need to have a stable income and the home must be worth $500,000 or less to benefit from the program, experts say.

In Southern California, for example, a family of two with an AMI of $88,000 a year can only purchase a home with no down payment in San Bernardino and Riverside counties.

 

 

First-time homebuyers can get up to $150,000 as ‘Dream for All’ opens in three weeks – 2024-03-14

Online applications for the second round of Dream for All, California’s down payment assistance program, are set to begin accepting applications in three weeks.

According to the California Housing Finance Agency (CalHFA), applications will open at 8 a.m. on April 3 and close at 5 p.m. on April 29.

This time, the Dream for All program is budgeted at approximately $250 million to support 1,600 to 2,000 new applicants.

Funds can be used for down payments or closing costs up to 20 percent of the home’s price or appraised value, or up to $150,000, whichever is less.

Applicants for the second round of Dream for All must be first-time buyers whose parents are homeowners; first-time homebuyers who have not owned a home in the past seven years; have a credit score of 680 or higher; and have a debt-to-income ratio of 45% or less.

The annual income limit is 120% of the area median income, with limits varying by county. In Los Angeles County, it is $155,000; in Orange County, $202,000; in San Diego County, $185,000; in Riverside County, $149,000; and in Ventura County, $195,000.

“The Dream for All program provides a loan of up to 20 percent of the purchase price of a home,” said CalHFA spokesperson Eric Johnson, “and approximately 20 percent of the home’s appreciation must be repaid to the state of California when the home is refinanced, sold, or transferred.”

First rolled out last year, Dream for All was overwhelmingly popular, but it was criticized for still failing to close racial and geographic homeownership gaps. This year, authorities changed the application process from a first-come, first-served system to a lottery and tightened eligibility requirements, including lowering the median income.

“With the change to a lottery system, it is more advantageous to prepare properly, such as carefully filling out the documents and completing the necessary training within the application period,” said Jee Lee, President of the Shalom Center. Winners will receive a voucher in May, which must be used to purchase a home within 60 days, he added.

In the three weeks leading up to the start of the online application, experts advised borrowers to speak with a lender that offers the Dream for All program, prepare a lender pre-approval letter, and take two mandatory educational courses.

 

 

Another round of down payment assistance coming to California’s first-time homebuyers – 2024-03-01

Starting in April, the second round of Dream for All, a California down payment assistance program aimed at helping individuals achieve their dream of homeownership, will resume.

The California Housing Finance Agency (CalHFA) announced that the program will begin accepting applications online in April.

Last year’s inaugural Dream for All program quickly exhausted its $300 million budget in just 11 days, approving a total of 2,100 loans.

According to the Shalom Center, a nonprofit organization, a total of 12 prospective buyers benefited from Dream for All support at the center last year, including five Korean Americans.

This year, the Dream for All program is allocated a budget of $250 million, which can support up to 1,670 loans of a maximum of $150,000 each. The funds can be utilized for down payments or closing costs, up to either 20 percent of the home’s price or appraised value, or $150,000, whichever is less.

“The Dream for All program provides loans of up to 20 percent of the purchase price of a home,” said CalHFA spokesperson Eric Johnson, “and homebuyers must repay approximately 20 percent of the home’s appreciation to the state when the home is refinanced, sold, or transferred.”

In its second iteration, Dream for All has transitioned the application process from a first-come, first-served basis to a lottery system and has tightened eligibility requirements to focus the program on those who need it most.

“The first-come, first-served application process limited the number of opportunities for those who really needed the support,” said Shalom Center President Jee Lee, adding, “The second round of the program will be based on geographic, ethnic, and income-based lotteries to ensure fairness in the selection of applicants.”

Eligible applicants are first-generation homebuyers whose parents do not own a house and first-time homebuyers who have not owned a home in the past seven years and intend to make the home their primary residence.

 

 

Shalom Center to Host Homebuyers’ Exhibition – 2017-03-22

Korean-American nonprofit Shalom Center will host its 26th home-buying information exhibit on March 25 from 10:30 a.m. in Buena Park’s Holiday Inn.

Various programs will be introduced to the event’s attendees. Some of those programs include the Low Income Purchase Assistance (LIPA), a city-run program for the low-income residents, as well as the MyHome program and other support systems offered by the city governments of Cypress, La Palma, Buena Park and Anaheim.

LIPA is a program that finances a loan of up to $60,000 for homebuyers with no interest. MyHome also assists 5 percent of homes that cost less than $600,000. Orange County residents can benefit from this program, combined with the Zero Interest Program (ZIP), which provides 3.5 percent of the total cost of the home, which means that the total assistance could rise up to 8.5 percent.

Another loan program, which grants home-buying with no mortgage insurance for buyers whose down payment is less than 3 percent of the total cost.

Information on other programs, such as Unemployed Mortgage Assistance and Principal Reduction Program, will be offered at the exhibit.

“You could minimize the burden of buying your first home when you use the state and city government-run programs,” said Shalom Center director Ji-rak Lee. “The upcoming exhibit will introduce a variety of programs that many Korean-Americans can utilize.”

▶ Location: Buena Park Holiday Inn (7000 Beach Blvd., Buena Park)
▶ Time: March 25, 10:30 a.m. to 2:30 p.m.
▶ Inquiry: 213-380-3700