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PW employee home-buying plan moves forward
There isn't much good news on the economic horizon but for Prince William employees, there is at least a little sunlight peeking through the clouds.This spring, county employees will be able to get low-interest home loans from Suntrust through a deal worked out by county and banking officials.
The program won't cost the county any money, said Finance Director Chris Martino, adding that the county regularly invests extra cash with financial institutions anyway.
Prince William will invest $50 million with Suntrust and will earn interest on the investment. In exchange, Suntrust will make $50 million in low-interest loans available to county employees each year.
"They are very interested in improving and assisting in the market here too," Martino said of the Suntrust company.
The county won't be responsible for loans and employees will still have to meet all of the bank's regular qualifications. The county is just "facilitating" the loans, Martino said.
The program is a one-time offer for any county employee who wants to buy a house in Prince William County for the first time.
The goal, said County Executive Craig Gerhart, is to help public safety workers, teachers and other entry-level employees to buy homes in the communities where they work, although the program is open to any employee.
There are some restrictions. Employees have to agree to live in the home that they buy and the program is only available to each employee once. It is intended to help renters buy homes or to help people who live outside Prince William to buy homes in the county.
There is a purchase-price limit of $300,000 per house. That will allow up to 167 employees per year to take advantage of the program.
However, officials are warning employees that the county won't help them with the details of their mortgages.
"We don't provide them with any protections, other than a paycheck, against the risks of being in that market," Gerhart said.
Each year, 83 loans will be available for public safety employees and another 42 to school system employees. The other 42 loans will be available to employees in any department.
If too many people apply, the county will hold a lottery: one lottery for each of the three categories.
However, if a person applies, wins a loan through the lottery and then is turned down by the bank because they don't meet the qualifications, that spot is just gone; the county won't hold another lottery to give away that loan.
"We're not going to keep a waiting list," Martino said.
Instead, he recommends that anyone interested in a loan contact Suntrust in advance to see if they will qualify.
Aside from the benefit to individual employees, the program will also help the housing economy in general by getting more vacant homes off the market. Martino estimates that the program will pull 5 percent of homes out of the housing inventory each year.
And there's even more help for low-income employees. The county has long been collecting proffer money for low-income housing assistance. Now, $210,000 of that proffer money will be given out as low-interest loans for employees who need down payment assistance.
An inability to come up with a down payment is one of the biggest obstacles to buying a home, Martino said. By giving low-interest loans to the lowest-income employees, the county will help people to buy homes who couldn't otherwise scrape together the thousands of dollars in upfront money.
Those loans will be given only to employees who make 80 percent or less of the area median income, he said.
County employees can apply for the loans starting in 2009. If a lottery is needed, it will be held in May. Those who are given loans will then be given just over a year to close on their new homes.
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