Struggling to save for a down payment? Your county government might be able to help

When Melissa Centifonti bought her first home in the Mayfair section of Philadelphia in 2008, she believed the fast-talking mortgage lender knew his stuff and had her best interests at heart. But she soon owed more than her home was worth, and the terms of her loan made it hard to leave when she needed to sell.

So when, after years of renting, she was ready to buy her next home in 2017, she wanted to be prepared.

"I knew I didn’t want to be taken advantage of again,” said Centifonti, a 40-year-old single mom to son Ethan.

She turned to Bucks County’s first-time home buyer program, which is open to people who have not owned a home in at least three years and provides up to $10,000 for closing costs and down payments.

Philadelphia, Bucks, Chester, Delaware, Montgomery, Burlington, Camden, and Gloucester Counties; the states of New Jersey and Pennsylvania; and governments across the nation have programs aimed at helping people become homeowners, in efforts to grow their tax bases, support the local economy, and promote a sense of community.

Bucks County officials announced last month that they were nearly doubling the money they would devote each year to their program. In the first 25 years, the county spent about $4.5 million. Over the next five years, the county is promising $1.6 million. Last spring, Philadelphia expanded its housing assistance program, launching Philly First Home.

After Centifonti applied, she found the support she needed, including housing counseling, and bought a house in Levittown in 2017.

“This program really helped me to alleviate some of the stress of spending all my money on closing costs, settlement costs, furnishing my house, utility bills," said Centifonti, a real estate agent since 2014. “This program gave me peace of mind.”

These days, counties may want to look beyond income requirements to expand who is eligible for housing assistance programs, said Lori Partin, an adjunct instructor at Temple University who specializes in public management, public finance, and human services. Billions of dollars of student loan debt are keeping some people from being able to afford homes, even though they earn more than income thresholds.

“We want to think about our middle-class and working-class families and how we can get them into homes and what channels we use to promote those,” Partin said. "Continuing with these public policies to expand home ownership is very important.”

Susan Lewis was strolling through aisles of vendors selling crafts and offering home improvement services at Downingtown Fall Fest last year when she spotted a table for Housing Partnership of Chester County. Lewis, a renter in the borough, picked up information about the county’s first-time home buyer program.

In May, Lewis, who had bought her first home in the early ’90s, bought a house in Coatesville.

At counseling sessions required in first-time home buyer programs, potential owners like Lewis learn about credit history, budgeting, saving, ownership tips, and criteria for loan approval. They find out whether they are ready to buy a home, and if not, what they can do to get ready.

Counseling is key, said area officials, including Linda Hill, director of the Delaware County Planning Department.

“We’re interested in getting people into the homes and keeping them there,” she said.

Area programs typically offer home buyers zero-interest loans of $5,000 to $10,000 for down payment and closing costs. Some programs, such as Bucks County’s, require repayment of the loans when the home is sold or transferred, and some, such as Camden County’s, waive repayment if a homeowner stays in the home for a certain number of years.

“We continue to find there’s folks that are eligible to get a mortgage but really have the barrier of finding money for the down payment and closing costs,” Hill said.

The Housing Partnership of Chester County buys and renovates homes and sells them below market rate through its program. Applicants have ranged from 18-year-olds starting careers after high school to couples in their 60s buying their first homes, said Nancy Frame, the organization’s executive director.

Lewis, who works in tech support, said her mortgage now is about $400 less than her monthly rent at her old place, which was about $1,200.

“I was renting, and I was struggling. Now I own, and I’m not struggling anymore," she said. “If you have a lower income for a while, you think there’s just no way I can buy a house.” But programs such as the ones for first-time home buyers “make it possible.”

Lewis said she didn’t know about housing assistance in her 30s when she bought her first home.

Frame of the Housing Partnership of Chester County said it comes down to something intuitive but important to remember: “Buying your first home is not something people know how to do because they’ve never done it before.”

The phrase first-time home buyer can be a little misleading. Programs in the region allow low- and moderate-income residents and workers who have not owned a house in the county in the last three years to apply.

Applicants must have time and some money of their own. Mandatory counseling can take weeks. One woman who called Melissa Snype-Jones, financial analyst and program coordinator for the Camden County Improvement Authority’s program, wanted help buying a house, but she had a relatively low credit score of 500 and only $100 in savings. Camden’s program requires applicants to have 3% of a house’s purchase price. Snype-Jones told the woman she wasn’t ready and to start saving and clearing her debt. She’s taking the advice.

Many of the program requirements are set by the U.S. Department of Housing and Urban Development, which funds much of the counties’ programs.

Income thresholds vary but are based on percentages of the area’s median household income. In most cases, potential home buyers must earn an income that is 80% or less of the median. In Bucks and Montgomery Counties, however, residents who earn up to 100% of the median household income are eligible, and the threshold is 120% of the median in Philadelphia.

Counties in the region typically accept 10 to 25 applicants per year, depending on available funds. In Delaware County, interest has “definitely” picked up in the last two or three years, said Hill of the county’s planning department.

Given that property taxes are typically counties’ main source of revenue, counties have a direct financial incentive to increase their share of homeowners. An improved tax base means more money for social services, schools, public safety, infrastructure, transportation, and overall governing.

Homeowners tend to be engaged in and attentive to their communities, because they have made a major investment there, said Jack Peterson, director of strategic relations for the National Association of Counties.

Residents who aren’t burdened by housing costs have more money to spend in the local economy, and home ownership creates stability in neighborhoods. That’s all good news for local governments.

Affordable housing is a top priority for counties, said Teryn Zmuda, research director at the association, and they’re approaching the problem from several angles. They are forming housing partnerships with municipalities and other counties, raising funds for housing initiatives through short-term rental fees, and, if they have the authority, restricting zoning to increase the housing supply, she said.

And, of course, officials are tackling the challenge in part by giving financial assistance to residents looking to buy homes. Counties of all sizes are facing the challenge of homeowners burdened by cost, she said.

“The barriers to home ownership," Zmuda said, "are a challenge in what we’re hearing in counties across the nation.”