The board of directors of the Utah Housing Finance Agency is releasing $25 million in mortgage money at 7.22 percent that will finance home purchases for 400 lower-income Utah families who have never owned a home before.William H. Erickson, UHFA executive director, said the agency will target the $25 million to first-time buyers across the state. Prospective buyers may qualify for this money providing their income and the cost of the home they want to purchase are below certain limits.
The limits vary from county to county and depend on the size of the household and the location of the home purchased.
Erickson said many families currently renting have seen rents rise to levels beyond their means and the UHFA's low interest rates make buying a home more affordable than renting in many cases.
For example, Erickson said, the 7.22 percent interest rate allows a household earning about $20,200 annually to purchase a $60,000 home with a monthly mortgage payment of $490. Many households are currently paying more than $500 in rent, with the likelihood that figure will increase.
He said the savings with a UHFA loan also are considerable when compared with conventional mortgage financing. With present conventional mortgage rates at 8.5 percent, first-time home buyers will realize considerable savings with a UHFA loan and will not need to earn as much money, Erickson said.