by: Kristen Guilfoos
Local realtors say a new federal program would help re-vitalize the local housing market. But as NewsChannel 10's Kristen Guilfoos found out, that local economic boost comes at a cost.
You could call it fast cash for first time home-buyers... The Department of Housing and Urban Development is in the process of turning the first time tax credit into an $8,000 loan.
Bree Proffitt and her husband are in the middle of purchasing their very first home. "We've been saving for a while. We had some money set aside."
When HUD's new up-front loan program becomes official, first time buyers like Bree will have access to up to $8,000... Which they could tap into at signing. It's money intended for the down payment. Keller Williams Realtor Troy Thompson says, "For first time home buyers, that's always been an issue."
An issue that could be solved with this up-front money, but that money has some strings attached. Amarillo National Bank Assistant Vice President Tracy Archer says, "No matter what, money is owed and you're going to have to pay it back. I mean, you're going to have to sign a promissory note saying you're going to pay it back."
The re-payment due date has not yet been set, but if you cannot reach it, you will be given a second mortgage... One with an interest rate set one half of a percentage point higher than your first home mortgage.
Bree says the money definitely help, but she's going to make sure she plans ahead to avoid the second mortgage scenario. "I would hope that we would be able to pay it back, that we'd be smart in our saving and spending of the money so that when it came down to paying back we'd have the money to do so."
Home-owner payment issues aside, local experts say this program has the potential to work wonders for the local housing market. Archer says, "Here in Amarillo it's not nearly as bad as on the east and west coast but I think it would help stimulate the economy and put a positive outlook on everything if we can get the houses to start turning."
There is no word on when this program will be put into action.