Posted on 01/03/2004 9:28:36 AM PST by GK_Chesterton
State's discount loan program for teachers, police, firefighters going fast
$2.5 million in low-rate mortgages claimed in a month By AMY RINARD
arinard@journalsentinel.com Posted: Jan. 2, 2004 Madison - Announced just a month ago, a new state program to grant special mortgage assistance to teachers, firefighters and police officers has already approved or is reviewing applications for $2.5 million in home loans, which officials say proves the program was needed.
By the Numbers
5% Current 30-year mortgage rate in the Homes for Our Heroes program. 5.73% Average 30-year mortgage rate nationally.
But critics argue that the new Homes for Our Heroes program, created by Gov. Jim Doyle, is political grandstanding that plays off the post-Sept. 11, 2001, appreciation for public safety personnel.
"This just seems to me to be totally political," said Michael Birkley, legislative director of the Wisconsin Property Taxpayers Association.
"And it's the type of thing that could backfire on the governor with all the people who aren't police officers, firefighters and teachers who also could use this low mortgage rate."
But Antonio Riley, secretary of the Wisconsin Housing and Economic Development Authority, which administers the program, said the fact that loans totaling $2.5 million have been made or are under review shows that the program is needed to help teachers, firefighters and police officers.
"We're saying to these people, 'We think you do unique work, and we want to encourage you to become homeowners and live in the communities you serve,' " he said.
WHEDA, which provides loans for low- and moderate-income housing, has set aside, on a one-time basis, $10 million for low-interest home loans earmarked for firefighters, police officers and teachers. This is a small fraction of the agency's total lending authority.
Public and private school teachers are eligible for the program. And in addition to firefighters and police officers, all deputies in county sheriff's departments are eligible. But other public safety personnel, such as emergency medical technicians and dispatchers, are not.
Favorable interest rate The program makes home mortgages to those who qualify at 0.25% below whatever the WHEDA mortgage interest rate is at the time. This week, interest on regular WHEDA 30-year mortgages was 5.25%, and the rate under the Homes for Our Heroes program was 5%. Nationally, the average 30-year mortgage this week had an interest rate of 5.73%, according to the Mortgage Bankers Association.
To qualify, teachers, firefighters and police officers must be first-time home buyers and must meet the same income and purchase price requirements that all applicants for WHEDA loans are subject to.
Household maximum income limits vary by county, ranging from $34,210 for a household of three or more people in Menominee County to $79,065 for the same-sized family in Pierce and St. Croix counties. The income limit for a family of three or more in Milwaukee and Waukesha counties is $68,860, and in Dane County the limit is $74,655.
All WHEDA programs, including Homes for Our Heroes, also have limits on the purchase price of a home. Those limits vary by county and by the size and age of home. For example, the purchase maximum price allowed for an existing single-family home in Adams County is $64,178, and in Waukesha County the limit is $170,295.
Since the program was announced Nov. 17, loans have been approved or soon will be for individuals in communities across the state, including Green Bay, Madison, Racine, Sheboygan, Stoughton, Wausau, Black River Falls, Delafield, Milwaukee, Janesville, Hudson and Waupaca.
Among those approved was a $132,000 loan made for the purchase of a home in Whitefish Bay, according to WHEDA officials. The program will save the Whitefish Bay home buyer about $20 per month compared with WHEDA's regular rate for a 30-year mortgage.
Riley said that the Wisconsin program is based on similar home loan programs for teachers, firefighters and police officers in other states that have been successful.
Affordability a problem In announcing the program, Doyle said the state must end situations in which public servants "who protect us and teach our children cannot afford to live in the cities that they serve."
Doyle's office referred questions about the program to Riley.
Riley said making it possible for teachers, firefighters and police officers to be able to afford a home in the communities where they work was the primary goal of the Homes for Our Heroes Program.
He said that housing prices are high in many areas of Wisconsin - including northern vacation spots and places near Chicago and the Twin Cities. But Riley said the salaries paid to public officials in those areas often aren't enough for teachers, firefighters and police to buy homes.
Kenosha County is one such area, where the price of homes has been driven up because of its proximity to Illinois, said Rick Gale, a West Allis firefighter who is president of Professional Firefighters of Wisconsin, which represents 3,000 firefighters.
"There certainly are spots like this that are more affluent where our guys would have a more difficult time buying a home," he said.
Gale noted that his organization did not ask Doyle to establish the Homes for Our Heroes program, or lobby for its creation. But he applauded the governor for doing so.
"If 25 percent of the funding for it is already gone, that must mean it's needed."
The state's largest teachers union also did not lobby for the program, said Michael Butera, executive director of the Wisconsin Education Association Council, which strongly supported Doyle in his campaign for governor.
Butera said, however, that the Home for Our Heroes program will help communities hire and keep good teachers, firefighters and police officers.
"To retain and attract teachers, police officers and fire officers to this state is absolutely essential," he said.
"In education, we face a looming shortage of teachers and, absolutely, to be homeowners and buyers is a positive step in securing and retaining teachers in our schools."
Birkley, of the Wisconsin Property Taxpayers Association, questioned why the program was limited to three occupations.
"I think this is just a bad idea," he said of the program. "I think there would be a lot of other people who could benefit from that $10 million."
But Riley said expanding eligibility for the lower interest rate would have been too expensive.
He said politics had nothing to do with creating the Homes for Our Heroes program and that limiting it to teachers, firefighters and police officers was appropriate.
"I think the people who educate our children and the people who put on that badge and get ready to lay down their lives, there's something very special about that service," said Riley.
| Rank | Location | Receipts | Donors/Avg | Freepers/Avg | Monthlies | |||
|---|---|---|---|---|---|---|---|---|
| 16 | Arizona | 130.00 |
3 |
43.33 |
346 |
0.38 |
95.00 |
9 |
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Answer - 19. Across the entire state of Wisconsin. For all the police, fire protection, and teachers in the entire state of Wisconsin.
I was giving away $100 bills on the street the other day. All of them were gone before the end of the day—they must have been needed.
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