Teachers, firefighters, police, and other municipal staff are locally revered for what they do – teaching, protecting and saving lives. But often, they can’t afford to live in the communities they serve. House prices may be eroding, but so are earnings. Meanwhile, down-payment requirements have tightened.
The conundrum of “workforce housing” — that is, providing housing for municipal and middle class workers essential for community functioning – is being addressed by a number of programs.
South Carolina is showing the way with “Palmetto Heroes,” a workforce housing fund open not just to full-time teachers, police and firefighters, but also to volunteer firefighters and state correctional officers. Terry Puleo, a mortgage broker with My Mortgage Connection and a member of the ForSaleByOwner.com broker Pro network, explains below how this program works. Like many other state programs, it combines down payment assistance with low-interest loans. A national overview of state programs is provided in the “Tackling Workforce Housing State by State” report, which details dozens of local programs, many funded and supported by the real estate industry. If you’d like to track news about workforce housing programs, check out the resources at the Urban Land Institute’s J. Ronald Terwilliger Center for Workforce Housing.
The South Carolina Palmetto Heroes program leverages loan guarantees through the Federal Housing Authority (FHA) with a $40 million down payment fund, explains Puleo. Like many other workforce housing programs, homebuyers are expected to stay in their new houses for at least three years – thus fulfilling the neighborhood stabilization goal of the program.
But unlike others, South Carolina tiers the program by income. Lower income buyers might have their down payment loan of up to $7,000 forgiven if they stay in the house for at least five years. Meanwhile, higher income borrowers are expected to pay back the down payment loan, but not for the first three years of homeownership, and even then, the loan carries only a 4% rate.
“You don’t necessarily have to be a first-time buyer to get in on the Heroes program,” says Puleo, who is based in Greenville. “In some targeted counties, you can use the program as long as you don’t already own a house when you are buying your new one. In non-targeted counties, you can’t have owned a house in the past three years.”
Of course, like all lending programs, the exact terms are tailored to each borrower’s circumstances – family size, county, and other qualifications. Terry Puleo can answer questions about the Heroes program as well as other mortgage products. She can be reached at firstname.lastname@example.org or (864)380-0443.