COUNTY APPROVES POSSIBLE HELP FOR FIRST-TIME HOME BUYERS

JACKSON -- First-time home buyers may get some help with their finances under a program approved Thursday by the Cape Girardeau County Commission.

Commissioners accepted a Stifel, Nicolaus & Co. plan to sell tax-exempt bonds to get money for low-interest home loans. James Lahay, first vice-president of the company, answered final questions about the program before the commission voted to approve it.

He explained that money collected through selling the bonds will go to Cape Girardeau County banks choosing to participate. First-time low- or middle-income home buyers who apply for loans would qualify.

Depending on the number of children in their families, the buyers could make up to $52,220 a year and buy a newly constructed home costing up to $121,000, Lahay said. The current interest rate for these families is 6 percent, with 2 or 2.5 percent points assessed up front for processing fees.

When commissioners met with area bankers three weeks ago to get their opinions of the Stifel-Nicolaus program, most seemed skeptical. They said they already could offer home buyers 8 percent loans with no points. The problem was getting a down payment.

Lahay said none of the bond money could be used for a down payment, but it could be used in conjunction with Federal Housing Administration or Veterans Administration financing, which allows for lower down payments than conventional financing.

Still, there may be some interested people who won't qualify through any program.

"Let's face it," Lahay said. "There are some people who aren't ready to buy a home yet. This program isn't designed so that every person can buy a home."

Lenders, not the county, will bear the risk if participants default on their loans, he said.

Agreeing that the county had nothing to lose, commissioners passed a resolution prepared by Stifel-Nicolaus. The resolution said that there is a shortage of affordable housing for low- and moderate-income home buyers and the county wishes to address the needs.

The county is applying for $15 million in bond money. Because the bonds are tax exempt, the state must approve the application.

"If this helps six people in Cape County get their first home, it's worth passing," Commissioner Joe Gambill said.

Lahay has to sell the program to area lenders. If the money sits dormant for 12 to 18 months, it will be reallocated to pay off the bonds, he said.

The state either will approve or disapprove the county's application by early spring.