Housing finance agencies in New Jersey and Pennsylvania plan to issue bonds to help keep subprime borrowers having trouble making their loan payments stay in their homes.
The New Jersey Housing and Mortgage Finance Agency plans to issue $30 million in taxable bonds, and the Pennsylvania Housing Financing Agency plans an initial issuance of $25 million to $50 million, the Philadelphia Inquirer reports.
New Jersey residents earning up to $135,000 annually may be eligible for 40-year fixed-rate loans at interest rates of 6.75 percent to 7.5 percent, depending on bond-market pricing, the Inquirer reported.
The program will serve existing homeowners paying higher-than-market-rate interest, or with adjustable or interest-only loans that they can’t afford.
Pennsylvania, which created a Homeowners’ Emergency Mortgage Assistance Program more than 20 years ago, is creating an additional workout program for loans where the principal exceeds the appraised value of a home, the Inquirer said.
Ohio also offers 30-year fixed-rate refinancing for borrowers with interest-only mortgages or adjustable-rate mortgage loans scheduled to reset.
The Ohio Housing Finance Agency hopes an initial bond issue will allow the program, launched April 2, to serve approximately 1,000 families assuming an average loan amount of $100,000 per home.
If demand is sufficient, OHFA plans to issue additional bonds or other forms of financing to provide up to $500 million in assistance each year if demand exists.