New Purchase Program Helps Local Family Achieve Dream of Homeownership

Kelly Edwards, USDA Rural Development | November 24, 2010

From the Official Blog of USDA

The Yorgey family was tired of moving from place to place and watching their money constantly going towards rent payments. They wanted to be able to have a permanent place of their own for their growing family to live. But, the idea of that actually coming true seemed like a distant dream. Thanks to a new USDA Rural Development and Southeast Wisconsin Housing Corporation (SEWHC) partnership program, their dream has now become a reality.

As a young family of modest means, Tim and Allison thought that they would always be renters. Tim, a sixth grade teacher at Faith Christian School in Williams Bay, and Allison, a homemaker raising their three young children, have been renting for more than seven years.

“We never thought that we would be able to purchase a home with our income,” said Allison, “if we were ever going to have a chance, now was the time with it being a buyer’s market.” It soon became apparent that they would not be able to able to obtain conventional financing at traditional terms. Then Allison found out about USDA Rural Development’s homeownership programs on the internet and contacted one of the Wisconsin RD offices.

The first steps in the process were to submit the application, receive their certification and then pre-approval. Now the search for their future home could begin. During their search to find a home that met their family’s needs, Tim and Allison ran across many hurdles and setbacks. They would find a house which upon inspection needed repairs or other work, and those repairs could not be included in the financing. These setbacks reduced their options to be able to purchase a home.

“I kept wondering if the only way that we would be able to purchase a home, was if we made the improvements prior to purchasing, in which case we would be putting time and money into a home that wasn’t even ours.”

It was at this time that Jordan Michalkiewicz, the USDA Rural Development Area Specialist working with Tim and Allison, told them of the new program through Southeast Wisconsin Housing Corporation (SEWHC) – the USDA Rural Development Purchase/Rehab Program. Art Gonzales, SEWHC Executive Director was in the process of working with USDA Rural Development to officially establish the Purchase/Rehab Program and modify their current grant program.

Shortly after hearing of the Program, the Yorgeys found their new three bedroom, two bath ranch style home, less than a mile from the school where Tim works. With the help of the newly established program, they were able to make necessary improvements that they would otherwise not have been able to afford.

“Tim and Allison were a perfect fit for this program. They were excited and energized by the program,” said Michalkiewicz.

The Purchase/Rehab program works with USDA Rural Development’s Direct Home Loan Program, with the ability to include repairs by working with a partner like SEWHC. The USDA Rural Development Direct Home Loan Program offers no down payment and low interest rates for qualifying applicants in rural communities. The Program provides for a long-term fixed interest rate, which is currently 4 percent. Mortgage payments are adjusted according to household income; therefore, the effective interest rate paid by the homeowner may be further reduced through interest rate subsidy to qualified applicants.

“This program was a godsend, but we kept thinking ‘where’s the catch’, because we truly thought that we would be renting forever,” said Allison. The Yorgeys were the first family to participate in the Purchase/Rehab Program, not only in Wisconsin, but across the Nation.

“Southeastern Wisconsin Housing Corporation has been a solid partner and knows the constituents we want to serve. We are excited to partner with Southeastern Wisconsin Housing Corporation for this worthwhile Purchase/Rehab program,” said Stan Gruszynski, USDA Rural Development State Director. “Owning your own home is part of the American Dream, and in rural areas financing a home can be difficult, but USDA Rural Development and SEWHC are here to help,” added Gruszynski. “By opening the doors to more homeownership opportunities we are helping to improve the quality of life for our citizens and our rural communities, and that is exactly what this program is doing.”

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