Thomas, formerly with Shearson & Lehman, believes community-based firms like his are needed to provide access at the grass-roots level and to function as a delivery system. "We are into a heavy campaign to spread the word to the community that homeownership is not out of reach of low-income families," he said.
"The hottest program in our community continues to be the Community Home Buyers Program," said Thomas, whose efforts are focused in South Central and other low- and moderate-income neighborhoods in Los Angeles. "This is truly a window of opportunity for folks who previously were shut out of the home buying system," Thomas said.
Besides getting low fixed rates, buyers have the added leverage of a down payment as low as 3% with the additional 2% obtained as a gift from a family member or a grant from a nonprofit or governmental agency.
"We talk about rebuilding L.A. If you had more homeowners, the communities would be stabilized," Thomas said, emphasizing the need for support, especially from neighborhood churches, to help increase homeownership. These nonprofit groups are the most likely to be responsive because they deal with community residents on a very personal level.
The liberal underwriting guidelines of the Community Home Buyer's Program enabled Rosas and Ramirez to become homeowners, even without ideal qualifications.
Loretta Rosas had an excellent, well-documented credit rating, while Raymond Ramirez had done little to establish his, even though he had no debts and had worked for the Vons food chain for 10 years. That created a problem for the couple.
Thomas showed Ramirez how he could build up his credit, bit by bit, with receipts and letters from local merchants, neighborhood stores, the cleaners, phone bills, cable TV service. "We also documented the fact that bank accounts are non-traditional among many Hispanics, who are accustomed to paying cash for services and products," said Thomas.
The couple had been able to save about $6,000 for a down payment. Through the program they were able to get a 95% loan of $146,300, and the seller agreed to pay their closing costs. It took less than 25 days to complete the transaction.
"This is a good beginning for us," Rosas said. "We are enjoying privacy we never had when we rented our apartment in Eagle Rock. We have a yard, and Raymond is already planning to build us a patio and barbecue and we hope later to add a master bedroom and another bath. Some day we'll be able to afford something better!"
(Low down payment programs, similar to the Community Home Buyer's Programs, are available through such agencies as the California Housing Finance Agency, the VA and the FHA.)