You may have heard about the Affordable Housing Preservation Act (HAPA) — the federal legislation that gives millions of people and families a chance to save on their mortgages.
But now the HAPA also allows for lenders to make up to $1.25 million in loans to help low-income families pay for the purchase of a home.
The program has already been successful in helping a number of families, including one couple who borrowed nearly $1 million to buy a home for their daughter.
But some of the more unusual borrowers may not have been able to afford the interest rate that would be required under the law.
For one borrower, the bank loan was only $2,000, and she was told by her bank to use that money for a down payment on a new house.
She had a friend who was able to save the money by refinancing.
Another borrower said her lender gave her a loan to buy the house for $3,000 but only $700 of that was for down payment, according to an article on HuffPost.
Some borrowers who took out the loan did not get a downpayment, according the article.
“They didn’t have any equity in their house, and that was very important to them,” said Elizabeth Kocher, a housing finance attorney in Miami.
“It was a great opportunity for them to take out a loan that they had no equity in.”
Here are some of these borrowers and how they fared.
Elizabeth KOCHER, REINFORCING HOABS: One borrower who took a loan from the HOA was Elizabeth K. Koccher, who had to give up her home in Florida and move to a new city in Texas to help pay for her daughter’s college education.
She said she borrowed $2.5 million for a new home in California and got a $1-million down payment from a bank.
But the $2 million in financing came with a $200 monthly fee that Kocber said her bank would not honor.
KOCER: When I got into that process, I was shocked, and it took me a while to get over the shock, because I was worried that I wasn’t going to get any money back, because they weren’t going back and forth with me.
It was very hard.
It’s a tough situation to navigate.
I would say that 90 percent of people that have taken this kind of loan, they don’t make any money, so they are not eligible for any federal aid.
And there’s a lot of people who aren’t eligible.
So I think it’s a very complicated situation, and I think the HPA has done a really good job at it, but it is very much a different experience for these borrowers.
They need a different kind of help than most people who are going through the foreclosure process.
And I think that it’s the banks and lenders who are actually doing the foreclosing, and they are putting the onus on people who need a loan, not the banks or lenders.
And if they don, they are going to have to bear the cost.
MICHELLE LYNCH: Another lender, Michael’s, told HuffPost that it did not provide loans for borrowers with income below 138 percent of the federal poverty level, and the loan was not funded.
The loan was for $1 a month, but Kocer says the $1 monthly payment would have been more than enough for a $500 down payment.
“I would say I made $400 a month just from that loan,” she said.
The couple is looking to sell their house for a total of $400,000.
And Kocers says that if they could get a loan for the down payment of $1 from another lender, they would be able to refinance.
“We have had a number lenders say they will put their $1 down payment down to $2 and they will buy a house for that,” Kochers said.
“And we would have a nice down payment that we can put towards our house, but we would not be able put that down payment toward a down mortgage.”
That’s why she says it is important to have a loan manager who can help with the refinancing process.
MEGHANIE BROWNER: I have a family member who had an income below $60,000 and she had no down payment to her home.
She couldn’t afford to refloat the home.
And so, she got a loan out of the HACP program.
It came with $500 a month down payment and it was paid off in two years.
So that was a little bit of relief.
She got a nice, cheap down payment — she would have to pay it off in three years, so it was nice.
But that wasn’t enough to keep the mortgage afloat.
And that’s when the loan got really bad.
MURRAY BOWEN: My son was struggling financially because