Rendell Announces Initiative to Kick-Start Housing Recovery

HARRISBURG – Gov. Edward G. Rendell today announced a new $1.2 billion statewide mortgage program to help more than 11,000 homebuyers with affordable loans that will also help boost Pennsylvania’s economy.

“To kick-start the housing recovery we need to repair the damage of the past few years and again make it possible for qualified homebuyers to get loans,” Rendell said. “Through the Pennsylvania Housing Finance Agency, we’ve created programs that have helped existing borrowers avoid foreclosure and re-finance unaffordable home loans. They’ve also helped first-time buyers achieve their dream of home ownership.

“Now, we will make financing available on attractive terms to help to 11,000 families realize their housing dream,” the governor said. “The message to existing homeowners and first-time home buyers alike is that now is a great time to buy a home in Pennsylvania.”

The initiative is a partnership between the Pennsylvania Housing Finance Agency, the U.S. Treasury, FannieMae and FreddieMac. Key elements of the $1.2 billion program include:

• Making 11,000 long-term (30-year), fixed rate, low-interest mortgage loans;
• Expanding the Keystone First program with an additional $10 million —enough for 2,000 homebuyers — to help buyers who are eligible for federal homebuyer tax credits to borrow up to $6,000 interest-free for closing costs and down payments; and
• Providing $50 million for approximately 450 new-home construction loans to encourage new building activity, create jobs, and boost the economy.

“Long-term, low interest, fixed-rate loans are exactly what our consumers need,” Rendell said. “These loans are the opposite of the kinds of ‘sub-prime,’ or ‘interest only’ and ‘adjustable rate’ loans that led so many homebuyers into trouble.”

The new program targets $50 million to encourage new home construction because funds for building new homes have been scarce in these tight credit markets. It will assist in moving existing inventory for homebuilders, and create jobs for architects, builders, laborers and others in the construction industry.

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