The U.S. homeownership rate rose to 66 percent in the third quarter of 1997, the

highest level ever recorded. A record 66.7 million Americans now own their own homes.

For many people, making the jump from renting to homeownership is an

important financial hurdle to clear. With mortgage

rates at low levels and housing inflation in check

in most areas, now is an excellent time for renters to become homeowners, as the

recent homeownership statistics would indicate.

There are many sources of assistance for prospective first time buyers. A good place

to start is with your state housing finance agency (HFA). HFA's have been given authority

typically run mortgage-revenue bond programs. Because interest on the bonds is tax-free,

they can be issued at lower interest rates. The money raised by selling the bonds can then

be lent by the HFA's to first-time buyers at below-market rates, thereby amking

the monthly mortgage payments more affordable.

State HFA's work with many partners, including organinzations such as Fannie

Mae. Fannie Mae is a private company that works to ensure that mortgage money is

available for people in communities across America.

It does not lend money directly to home buyers. However, by purchasing mortgages from

lenders, Fannie Mae frees up money for making additional loans.

In March 1994, Fannie Mae announced an unprecedented "Trillion Dollar

Commitment" to address the unmet housing needs of

American families. Under this commitment, Fannie Mae will earmark $1 trillion to finance

more than 10 million homes for low-income families, minorities, new immigrants, families

who live in central cities and other undeserved communities, and people with special

housing needs. A principal purpose of the program us for Fannie Mae to work with other

industry partners to eliminate barriers to homeownership.

First-time buyers should not overlook some of the long-standing government

programs which facilitate homeownership. Buyers

may be eligible for loans guarentted by either the FHA (FHA) or the veterans

administration (VA). These federal agencies do not

lend meny directly, but by providing guarantees, they allow lenders to offer loans with

lower down payments.

First-time purchasers also can make use of a special new provision in federal tax laws.

In 1997, Congress passed a new provision allowing first-time buyers to withdraw up

to $10,000 from their IRA accounts if the money is used for the down payment on a home.

The penalty-free provison can be applied to IRAs owned by the buyers, the parents or

grandparents. Under current law, early withdrawels from an IRA incur a 10 percent penalty.

The programs described above only scratch the surface of some of the opportunities

that may be available for prospective first time buyers. Your state HFA may be able to

provide you with information about programs that exist at the federal, state, and local

levels. You should also talk to local lenders and

local housing agencies to learn more about available programs.

So if you are a renter who thinks that you could not possibly afford to buy a home,

think again. Information about a program that

could make you a homeowner may be only a few telephone calls away.

<!--##############