Freddie Mac, Georgia Kick Off $60 Mil Home Plan

Freddie Mac, the state of Georgia, Atlanta-based Bank of America, Birmingham, AL-based SouthTrust Mortgage Corp., the city of Augusta and the Augusta Neighborhood Improvement Corp. are participating in a $60 million home ownership program aimed at revitalizing Laney-Walker.

"The revitalization taking place in the Downtown neighborhoods of Augusta will become a model that can be replicated on other communities in Georgia," Gov. Roy E. Barnes says in a prepared statement.

Freddie Mac and the state are each contributing $30 million. Bank of America is giving $250,000 to Augusta Neighborhood Improvement Corp.

The basic Freddie Mac Community gold Mortgage plan will allow families to buy homes with conventional mortgages from Bank of American and South Trust Mortgage that require either $1,000 down or 1% of the sale price coming from the borrower's personal funds. The balance of the mandatory 3% down payment may come from grants, gifts, unsecured loans or Individual Development Accounts.

Bank of America's Neighborhood Advantage Credit Flex program is available to families earning up to 80% of the area median income. The program has a 3% down payment requirement but only $500 has to come from the borrower's own funds. The balance can come from gifts or other sources.

Down payment assistant, ranging from $5,000 to $20,000, will be available through Augusta Neighborhood Improvement Corp. to eligible families who live in the Laney-Walker target area.

The program provides a soft second mortgage at zero interest that is forgivable over five years at the rate of 20% a year. Borrowers don't have to make monthly repayments of the down payment assistance, but they have to put at least $500 in personal cash into the purchase.

Teachers, police, firefighters and healthcare workers also qualify for enhanced down payment assistance. ANIC's New Neighbors Program offers similar soft second mortgages up to $40,000 to encourage municipal workers to live in the communities they serve.

These down payment loans, also forgivable over five years, can't exceed 50% of the home sales price.

"The Augusta initiative is one of the most comprehensive and well-thought-out neighborhood-based homeownership campaigns in the nation," Craig Nickerson, vice president of community development lending at Freddie Mac, says in the prepared statement.

During the past five years, Freddie Mac has invested $1 billion in in mortgages for 13,000 Augusta families, Nickerson says.