The First Time HomeBuyer magazine » Financial Fitness

Community Renewal Team, Inc. cordially invites you to a Community Meet and Greet

admin — Thu, 17 Jun 2010 14:08:15 +0000

What: Community Meet and Greet
When: Thursday, July 8, 2010
5:00 pm – 7:00 pm
Where: West Indian Social Club of Hartford
3340 Main St., Hartford
Come chat with the CRT Common Cents Team about
how free counseling and workshops can help you and
your customers.

Common Cents topics include:

Eviction and Foreclosure Prevention
Individual Development Accounts (Matched Savings)
Homebuyer Workshops and Pre-purchase Counseling
Financial Literacy, including credit repair and budgeting

Click here to Download Event Flyer

IRS Videos on YouTube May Help You Get a Bigger Refund.

Alex — Thu, 25 Feb 2010 19:10:25 +0000

The IRS has produced a series of videos that may help this years tax payers a bigger payback come April 15. The videos are featured on YouTube and cover new and little known tax deductions centered around the departments Recovery Acts, such as Making Work Pay, Vehicle Tax Deduction, and the New HomeBuyer Credit. Head over to the IRS’s YouTube channel and check them all out. Videos are available in English as well as Spanish. For more information on all recovery acts by the IRS go to IRS.gov/recovery.

Thanks Harland!

Keeping Up with the Joneses? Not!

admin — Sun, 08 Mar 2009 19:38:21 +0000

Many of us are still living our lives trying to keep up with the Joneses. We have developed an insatiable consumer mentality that craves designer clothes, fancy cars, and oversized houses in high-consumption neighborhoods where the Joneses live. Watch the debt add up.

Worrid female spenderWe buy designer clothes (expense – primary), and in order to keep them looking good, we must dry-clean them (expense – secondary); I mentioned to my dry cleaner that it seems like I keep paying for the same clothes over and over again. We buy a fancy car (expense – primary), and in order to ‘enjoy’ our fancy car, we need to wash it weekly (expense – secondary) and detail it monthly (more expense). We buy a big house (expense – primary). Now we need to furnish it (expense – secondary), and since the house is in a fancy neighborhood, we need lawn care (more expense). Now because we have this image, we dine in fancy restaurants so we can talk about it to our fancy neighbors and our fancy co-workers. And, the kids – celebrity sneakers, designer jeans, and the most popular shorts so the kids can fit in – more expense.

By the time we get done keeping up with the Joneses, we are over-extended, broke, and stressed out. And here is the kicker: the Joneses came to their senses, sold the big house, had a tag sale and moved to a right-sized house in a culturally-diverse neighborhood.

All of this describes some of us to a tee. Some of it describes some of us. For the lucky few that can’t relate because they are living within their means, congratulations! The other 99.9%, read on.

While I was in the mortgage business, I unfortunately saw the profiles of people who were one or two paychecks away from financial disaster. Most of us can afford to live the way we are living as long as nothing changes. There is no room for error however; don’t lose your job, don’t need to replace your brakes, don’t have an emergency because if you do, watch out!

Where am I going with this? It’s time for us to become mature with money. It’s time to take control of money instead of giving money control over us. To take serious control of money means that we take control of our lives. And as we take control of our lives, we must examine our needs because needs drive our desires and our desires drive our actions.

I remember learning in elementary school that we have three basic needs – food, shelter and clothing. Every other need we create in our minds. In today’s society, we can make a compelling argument for a few more basic needs but they are really only choices we make. It’s time for us to make these choices with awareness and maturity. Overextending ourselves on wants is not mature. Most of us, present company included, function on impulse but basic needs are not frivolous impulses. You know well in advance that you are going to be hungry, that you will need to rest in a comfortable place, and that you will need to dress for the weather. We have given up control of our lives with artificial needs.

So who have we given up control of our lives to, and how do we take back control?

Ultimately, as mature adults, we are solely responsible for our actions, including our financial actions. However, we are also constantly reminded by the media and advertising that our self-worth is defined by what we have – our material possessions – the myth of the Joneses. A myth that sometimes drives us to pursue what we cannot afford and into the debt traps of high-interest loans and credit cards.

I am confident that there is a lifestyle enlightenment happening in which we are beginning to realize that we don’t need 10 pairs of jeans, 20 pairs of shoes, 5 winter coats, an over-stocked cupboard, an extra room for guests, an SUV that gives us 12-20 miles to the gallon, and designer sneakers. We are realizing that we have become mindless consumers of what Robert Kyosaki calls “do-dads” in his book, Rich Dad, Poor Dad. It’s time to be fully aware of our decisions and be peace with ourselves as a result of our mature decisions.

When we develop financial maturity we will work less, have more and give more. We will take pleasure in our lives again, talk with our neighbors, and spend more time with family. If you think this is a utopian dream, think again. We were doing it here 25 years ago, and it’s being done in other parts of the world today. I was talking to a friend from Italy who mentioned that in parts of Europe, the only card issued is a debit card. While I was in Germany, I had this verified by another friend. Excessive credit and debt, in some parts of the world, imply a lack of discipline and a superficial existence.

I am suggesting here that we take a look at how we live our lives. Put money in its proper place: as a servant to you versus you being its servant. That is the definition of wealth, by the way – having money work for you instead of you working for money. If you haven’t read it yet, read The Millionaire Next Door by Thomas Stanley and William Danko. It will shed light on the Joneses and who the real millionaires are. My grandmother used to tell me not to follow fashion or “no falla fashan” in my Jamaican patois which meant not to try to keep up with the Joneses. She didn’t have my education, but I wish I had her wisdom.

Marlon Lindsay is the Publisher of the First Time Home Buyer magazine. Contact him at 860-761-6801 or by email at marlonlindsay@mac.com.

Cambridge Corner: Seeking out a Debt Management Company

admin — Sun, 08 Mar 2009 19:37:00 +0000

by Thom Fox, Cambridge Credit Counseling Corporation

Credit-counseling agencies like ours help people with unsecured loans by renegotiating certain aspects of their repayment agreement. We also educate consumers about the proper use of credit, the responsible management of debt, and the appropriate methods used to build savings so they can make more informed financial decisions in the future. Because only seven states currently mandate personal finance education, credit-counseling agencies have had to take on that responsibility.

A good credit-counseling agency actually educates the public on two levels. First, the agency works within its local community to educate a variety of groups about personal finance. They do this by conducting workshops and seminars about specific financial issues of interest to their audience. Second, the agency provides free one-on-one counseling and information to consumers who contact the agency directly. A reputable agency will also perform a full financial assessment to help diagnose the root cause of the consumer’s difficulty, and the counselor and consumer will work together to create effective, realistic solutions that address the situation. In some circumstances, a small percentage of consumers may benefit from the structured guidance of a debt repayment plan. These consumers would then be given the option of enrolling in the debt management program (DMP) offered by the agency.

Benefits of a DMP

Reduced Interest Rates: Most creditors will reduce the interest rate on an account enrolled in a DMP.
Accounts Re-Aged: If certain criteria are met, many creditors will change the status of an account from delinquent to current.
Elimination of Late and Over-Limit Fees: Typically, a consumer’s future late and over-limit fees will be eliminated as long as they are enrolled in a DMP.

What to avoid when choosing a Credit Counseling Agency

Quick Payment Quotes Over the Phone: Your creditors have very specific guidelines for setting up a DMP. If a company quotes you a payment without asking for all of your account information and a full disclosure of your budget, you are getting an uninformed estimate.

Ads Promising to Reduce Your Payments by 50% or More: One benefit of joining a DMP is that many creditors will reduce your monthly payments. Not all of them will, however. Beware of promises that seem too good to be true.

Unclear or Vague Contracts: Most DMPs require that consumers sign a service agreement or contract that describes the terms of service. These contracts should clearly explain how the service works, what the fees are, and what is required of the consumer to complete the plan successfully.
“Voluntary” Contributions: There is nothing wrong with paying fees for quality service, but if a debt management company tries to tell you that all their fees are voluntary or seems vague about the actual costs of their service, be wary. Most of their fees are probably not voluntary or are hidden in their service contract.
Plans That Sound Too Quick and Easy: There is no such thing as a five- or ten-minute program for becoming debt free. There are too many steps in the process and too much information that should be exchanged between you and your counselor. It will take a fair amount of time for a counselor to understand your situation well enough to devise a plan with you, particularly if it involves enrolling in a DMP. If you feel you’re being rushed into joining a DMP, seek another organization to help you.

If you would like to know more about how a credit-counseling service may be able to assist you, please contact us at Cambridge Credit Counseling Corporation at 1-800-CAMBRIDGE.

Individual Development Accounts- A New Savings Tool for First-Time Home Buyers

admin — Sun, 08 Mar 2009 19:35:37 +0000

Individual Development Accounts (also known as IDAs) are matched savings accounts that some first-time home buyers can use to put together the down payment for a home they are saving to buy. In the Hartford area, there are several IDA programs operated by organizations that are members of the Hartford Asset Building Collaborative (HABC). Co-opportunity, Human Resources Agency of New Britain, Mutual Housing of Greater Hartford, the Urban League of Greater Hartford, and the Village for Families and Children offer IDA programs. IDAs are especially designed to meet the needs of working families with limited incomes. HABC IDAs are for residents of Hartford and surrounding communities and New Britain. There are other IDA programs serving residents of almost all large cities and towns in Connecticut.

Here’s how they work:*
Savers agree to save up to $2,000.00 in earned income in 2 to 3 years on average. After completing all program requirements, their $2,000.00 will be matched 2:1. This means that the organization running the program will add $4,000.00 to the amount a first-time home buyer has saved to put into a down payment.

Program requirements include:
1. Completing all seven sessions of a personal finance money management class.
2. Meeting monthly with a financial counselor to talk about budgeting, credit, and other financial challenges that arise.
3. Making regular savings deposits each month as agreed.
4. Taking the necessary steps to improve credit and show good money management habits.
5. Completing an approved Homebuyer Education course.

Here’s who is eligible:
To be eligible applicants must be able to show that they have regular earned income from full-time or part-time employment. IDA program counselors look at household income when deciding whom they can admit. Income guidelines depend on household sizes. A family of four, for example, can earn up to $40,000 and be eligible. A single person with income up to $19,600 is also eligible.

Counselors also look at what applicants already own and what they owe when they apply. There is a rule, for instance, that eligible households cannot have more than $10,000 in net worth. Net worth is what is left when you subtract what you owe (debts) from what you own (savings and investments). One car is permitted and is not considered part of net worth. In order to use an IDA to purchase a home, it must be a saver’s first home in order to count.

Other things to know:
The shortest amount of time a saver can take part in an IDA program is six months. The longest amount of time depends on when a saver enrolls in the program. It will never be much more than five years. Usually the time available is between three and four years. Frequently savers reach their $2,000.00 savings goals in two to three years.

Housing counselors working with IDA programs help savers through the whole process of home buying—from preparing to buy to finding professional help (real estate agents, mortgage brokers, appraisers, lawyers, etc.). They help savers go through the closing on a first home. Finally, once home buyers have moved in, counselors remain available to help with any matters that arise—such as maintaining the home, finding and hiring contractors, and dealing with family financial issues.

Timothy Cole, Ph.D., is the Director of Development and Community Relations at Co-opportunity, Inc. in Hartford. Since 2001 he has been a pioneer in introducing Individual Development Accounts in greater Hartford. For more information, he can be reached at 860-236-3617 ext. 112 or timothyc@co-opportunity.org.
How to find out more:
Hartford-area residents interested in IDAs can call any of the people listed here:

Co-opportunity, Inc.
20–28 Sargeant Street
Hartford
Call Maria Rivera,
860-236-3617 ext. 105

Human Resources Agency
of New Britain
180 Clinton Street
New Britain
Call Dora Whitehouse,
860-225-1084

Mutual Housing Association of Greater Hartford
95 Niles Street
Hartford
Call Marlyn Miranda,
860-547-1205

The Urban League of Greater Hartford
140 Woodland Street
Hartford
Call Evelyn Branch,
860-527-0147 ext. 124
The Village Center for Community Life
331 Wethersfield Avenue
Hartford
Call David McGhee,
860-297-0598 ext. 795

* There are actually several different models for IDAs. Here we are talking about one particular model that is supported by the US federal government under the Assets for Independence Act (AFIA).

Money as a Second Language: Financial Literacy for Children

admin — Sun, 08 Mar 2009 19:33:31 +0000

It’s sad when you think about it. We live in a country where I’ve heard immigrants say “the streets are paved with gold” and “the opportunities are endless.” Yet there are hundreds of thousands, if not millions, of Americans born and raised in the United States who live in poverty and can’t seem to get out. Why is it that when these children of lower-income families grow up, many of them can’t seem to get out of their cycle of poverty? One of the many reasons I believe surrounds a lack of financial literacy. Understanding things financial–how money works and how your values and goals contribute–is, in my opinion, critical to being able to lead a life that is going somewhere other than in circles.

Most children grow up in homes where financial matters and anything pertaining to money is rarely if ever discussed. Money, after all, seems to be a taboo topic that no one wants to talk about. Why is this? Money itself is neither good nor bad. It is actually the use of money and the attitude toward money that is the problem. Consequently, our children are growing up without much if any direction from their parents on the use and handling of their earnings. This is understandable, because their parents probably had no training either and may be feeling inadequate for teaching these skills.

So, if the parents aren’t teaching their children, are the schools taking on this responsibility? Our public school systems in Connecticut teach very little about money management, credit, investing, banking, and other important topics that our young people need to know. The only exception is when a student who is weak in math gets placed in a business math class that introduces checking accounts management. Course electives on personal finance do of course exist in Connecticut public schools, but most young people are more interested in spending money than in learning about what they need to do with it.

So our children grow up and move out, and then they kind of learn as they go about things financial–either based on the information of people they know or of other so-called experts. Predatory lenders and credit card companies preyed on their ignorance, and before they know it they’ve been evicted multiple times and have credit scores under 550. They may be giving out their personal information to agencies and telemarketers without even realizing how valuable that information is when put in the wrong hands.

Financial literacy is important. Education builds confidence and provides information, which is why many nonprofit organizations are offering free classes on goal setting, investing, credit card use, and predatory lending.

We need to financially educate our children as much as we educate them in areas of history, science, math, and literature. A financial education will be something that young people will absolutely, positively need at some point in their lives. And the return on that investment is priceless.

For more information please contact Andrea Hardy at the CRT H.O.M.E. (Home Ownership Made Easy) Center. She can be reached at 860-560-4210 or hardya@crtct.org.

Unveil the Mystery of Your Debt-to-Income Ratio

admin — Sun, 08 Mar 2009 19:32:40 +0000

by Thom Fox

The debt-to-income ratio is an important measure of financial stability commonly used by lenders. It is a representation of your monthly debt payments vs. your gross monthly income (before taxes and other deductions). A high debt-to-income ratio can jeopardize your chances of financing major purchases, such as a car or a home. Maintaining a low debt-to-income ratio will make it easier for you to qualify for the lowest interest rates and best terms.

Calculating a Debt-to-Income Ratio
Your debt-to-income ratio is represented as a percentage. The first step in calculating this ratio is to assess your total gross monthly income. Be sure to include any additional income you regularly receive, such as:
* Alimony and child support
* Bonuses, commissions, and tips (approximate values)
* Dividends and interest earnings
* Government benefits and/or assistance

Next, list your current minimum payments on all credit cards and loans (except mortgage). Be sure to include:
* Car payments
* Installment loan payments
* Bank/credit union loans
* Student loan payments
* Credit lines

The Debt-to-Income Ratio Calculation
Monthly debt payments ÷ gross monthly income
Example:
* Monthly debt payments = $700.00
* Gross monthly income = $3,200.00
* Debt-to-income ratio = 700 ÷ 3,200 = .218
* Note: To get a percentage, multiply 0.218 x 100. This would be 21.8% (round up to 22%).

Why Use Your Gross Income?
When qualifying for a high-ticket item such as a home, this method allows you to make a more expensive purchase. Though you can qualify for a larger mortgage amount, you must always remain conscious of what you can actually afford. Let’s look at an example of a consumer who does not take affordability into consideration.

* Johnny First-Time Home Buyer has an annual gross income of $70,000.
* His gross monthly income is $5,800.00.
* He qualifies for a $188,500 mortgage.
* His monthly mortgage payment would be $1,254.00.

At first glance, it doesn’t look like Johnny will have any problem making his monthly payment, but remember, this was based on his gross income. Let’s take a look at what his net income (take-home pay) would be.

* He has an annual gross income of $70,000.
* He’s in the 30% tax bracket.
* He pays $21,000 a year in federal tax.
* He pays $2,800.00 a year in state tax.
* He pays $4,340.00 a year to Social Security.
* He pays $720.00 a year in medical insurance.
* His net income would be: 70,000–21,000–2,800–4,340–720 = 41,140
* Johnny brings home $41,140 each year, or $3,428.00 a month.
* His monthly mortgage payment would be 36.5% of his net income.

In this example, Johnny may experience difficulties making his mortgage payment depending on what his overall budget looks like. As I emphasized in my earlier budgeting column (First-Time Home Buyer, Spring 2006), many people will tell you that you’d be crazy not to take out the maximum loan that they say you can afford according to their calculations. The truth is, they don’t know what you can afford. Remember, they’re using your gross income. Only you know where your money goes. Therefore, only you can determine just how much you can afford as a monthly mortgage payment.

What Is an Acceptable Debt-to-Income Ratio?
Generally, the lower a debt-to-income ratio is, the better the consumer’s financial condition. The credit opportunities described below are typically extended to consumers who fall into the ranges shown.

A ratio of 10% or less: Should not have trouble getting loans. May qualify for lower rates.
11–20%: Should not have trouble getting loans. Time to scale back on spending.
21–35%: May not have trouble getting new credit cards, but is spending too much of monthly income on debt repayment.
36–50%: Will qualify for certain loans, but at higher rates. Time to develop a plan to get out of debt.
More than 50%: Will have great difficulty qualifying for financing.

Thom Fox is a public speaker and personal finance author who has helped to develop numerous programs for both young people and adults. As an expert in the field of personal finance, Mr. Fox has served as a guest lecturer for the Bruce Wells Scholarship Upward Bound program at Clark University and panelist for both the Nichols College “Cycle of Debt in America” student Q & A and the California JumpStart Coalition “Innovative Financial Literacy for Youth” conference.

Ten Money Management Rules

admin — Sun, 08 Mar 2009 19:31:08 +0000

For a lot of us, money management doesn’t come easily, but remember, money itself is neither good nor bad. It is up to us—the people using the money—to manage it well. So the next time you try putting your “financial house” in order, try following these ten basic guidelines complied by Consumer Credit Counseling Services, a division of Money Management International (MMI) is a national nonprofit, community service organization that provides professional financial guidance, counseling, community-wide educational programs, and debt management assistance.

1. Know your financial situation. In other words be real with yourself. If you make $300 a week or $500 a month, this is the reality of your situation. It is only a starting place and is neither good nor bad.

2. Set financial goals. Knowing what is important to you—your priorities and your values—will not only help you with your goals, but the information will also keep you on track so you can meet the financial goals you set.

3. Plan for expenses. Birthdays, holidays, and car repairs are expenses that you should expect. Plan for these events by putting money aside.

4. Develop a realistic budget. If you took the time to set goals (from step two), you will set a budget that meets those goals

5. Distinguish betweens needs vs. wants. We live in a society that loves to convince us that we need everything. In reality, as long as we have a roof over our head and clothes on our back, food on the table, as well as electricity, heat, hot water, and a basic phone line, the rest is just luxury. Knowing the difference between needs and wants will put spending in perspective.

6. Do not allow expenses to exceed income. This sounds great, but the reality for you may be that there isn’t enough income to meet even basic needs. If this is the case, you need to get creative with budgeting. Perhaps you could dine at a family member’s home twice a week to save money on food, or you could exchange child care with someone (you could watch children at night while the other parent watches your children during the day, allowing both parents to work without paying for child care). Where there’s a will there’s a way; even though it may seem impossible, it’s not.

7. Save! This is another important habit. Even if you can start by saving only $5 per week, do it. Learn to save small amounts over a long period of time. Did you know that investing $1 a day wisely from age 20 through age 55 would mean you would have $1,000,000?

8. Pay your bills on time. Paying your utilities and rent on time is the way to begin establishing credit. Doing so consistently may go a long way toward getting a car loan or credit card at a lower interest rate.

9. Use credit wisely. Another thing America does well is soliciting for credit cards. Do yourself a favor and get educated on credit before you get a bunch of credit cards, max them out, and wreck your credit score. It doesn’t take long to destroy your credit, but it could take years to repair it.

10. Track your spending. Before creating a spending plan, see where your money is going. From there, you can prioritize your financial goals and begin to put together a spending plan.

Managing money is something most of us were never taught; rather, we learned as we went, often picking up the financial habits of people who may not have made good choices. Using these ten tips is a start in trying to organize your financial house.

For more information please contact Andrea Hardy at the CRT H.O.M.E. (Home Ownership Made Easy) Center. She can be reached at 860-560-4210 or hardya@crtct.org.

Finding Down Payment Assistance Programs in an Overpriced Market

admin — Sun, 08 Mar 2009 19:29:33 +0000

Alarming headlines in Connecticut newspapers, magazines, housing advocacy newsletters, and lender publications have all taken turns promulgating the woes of the housing affordability crisis confronting residents throughout the state. In May 2006, the Partnership for Strong Communities (an organization conducting research, providing education, and proposing solutions for housing policy) launched a new HOMEConnecticut campaign that will explore the issues impacting housing affordability in Connecticut and propose innovative solutions that may help to alleviate some of the problems.

Current research shows housing costs in Connecticut increased by 63.6% between 2000 and 2005, with a dramatic increase in the housing median sales prices in the state. In the second quarter of 2005, the U.S. median sales price was $208,500, while the Connecticut median sales price was significantly higher (at $328,800). If you were interested in purchasing a property in Fairfield County, the median sales price was even higher (at $549,600).

Potential first-time homebuyers and residents with low and moderate incomes are particularly challenged by this dilemma. Staking a claim to the American dream of homeownership once again appears more illusive than ever. Yet for these borrowers, there is a flickering beacon of hope in the form of Downpayment Assistance Programs (DAP) for eligible and qualified candidates.

In general, there are three types of DAP programs available: loan-to-grant, grant-to-loan, and discounted second-mortgage loans.
1. In a loan-to-grant program, DAP’s financing is available with an interest-free loan secured by a second mortgage on the property and forgiven over a specified period of time. For example, utilizing funds provided by the U.S. Department of Housing and Urban Development (HUD) in April 2005, Governor Rell announced the American Dream Downpayment Initiative (ADDI) program that is being administered by the State Department of Economic and Community Development (DECD). The ADDI program provides up to 6% of the purchase price of the home, or $10,000—whichever is greater, to qualified buyers. Additional assistance of up to $15,000 or more is available when needed to make the home purchase more affordable for the buyer. The loan is forgiven over a five- to10-year period, depending on the amount of assistance provided. There are regional, income, and sales price restrictions associated with the program. DECD has partnered with several nonprofit housing agencies to implement the program throughout the state.

Additional Information on ADDI Programs
Fairfield County: Housing Development Fund, 203-969-1830
Hartford County: Urban Suburban Affordables, 860-527-9860
New London County: House New London, 860-447-8011 ext. 15
New Haven and Waterbury areas: Neighborhood Housing Services (NHS) of CT
New Haven NHS, 203-562-0598; Waterbury NHS, 203-753-1896
2. Grant-to-loan Downpayment Assistance Programs (DAP) financing is significantly different from loan-to-grant programs. Grant-to-loan financing is usually structured utilizing an interest-free loan that is secured by a second mortgage on the property that is due and payable upon sale of the property, transfer of the title, or payoff of the first mortgage loan. In Fairfield County, the Housing Develop Fund (HDF) administers an Adopt A House Loan product that provides downpayment and closing cost assistance of up to $10,000 through an interest-free loan secured by a subordinate mortgage on the property that is due and payable as described above. For more information on the HDF Adopt A House Loan product, call 203-969-1830.
3. With discounted second-mortgage DAP financing, second-mortgage loans are provided that usually have a set interest rate that may or may not be reduced and is amortized concurrent with the first mortgage loan, usually for terms of 20 to 30 years. The Connecticut Housing and Finance Authority (CHFA) offers a DAP program where the financing is secured by a second mortgage on the home at the same interest rate as the regular CHFA home buyer mortgages loan product. (Note: The regular CHFA home buyer mortgage loan interest rate is generally discounted when compared to local lender market rates and loan rates promoted by mortgage brokers.) Additionally, special CHFA DAP loans are available at an interest rate of 1% to some income-eligible borrowers under the Homeownership Program (for residents of public and subsidized housing). Visit the CHFA website at www.chfa.org for more information on the CHFA DAP program and for a list of approved lenders that are authorized to originate the CHFA mortgage loan product.

Most DAP programs have strict eligibility criteria including income and sales price restrictions, because they are targeted at first-time home buyers who need help bridging the affordability gap for home purchases. (Additional restrictions may also apply depending on the program.) While these programs alone will not eradicate the many challenges of affordable housing that face our communities, they do help by providing some alternative financing options for people who otherwise would be locked out of the home purchasing market under the current conditions. Many of the DAP programs are administered by nonprofit agencies like the Housing Development Fund (HDF), Neighborhood Housing Services Organizations (NHS), Mutual Housing Associations (MHA), state and local DECD (Department of Economic and Community Development) offices, and faith-based initiatives, like the Christian Activities Council’s Urban Suburban Affordable Program. Some financial institutions and banks offer special affordable lending mortgage loan products for first-time home buyers that may also include down payment assistance options for qualified borrowers. To find out more about DAP programs and for appropriate referrals, contact any of the agencies listed above or a local lender in your area.

While the housing affordability crisis looms over the state, housing advocates concerned with the issues of chronic homelessness and affordable housing continue to look for innovative ways to address the problem. DAP is one of those ways that is available now and provides for a DAP-to-DAP experience: Dreams Approved Partnership (DAP) through Downpayment Assistance Programs (DAP).
Valencia Taft-Jackson is vice-president of the Affordable Lending Group at People’s Bank and a member of the Connecticut Mortgage Bankers Association, Inc.

Keep Some of Your Refund for a Home- IRS makes splitting refund fast and easy

admin — Sun, 08 Mar 2009 19:28:28 +0000

by Donna Taglianetti

This year you have more options and flexibility for choosing how to receive your 2006 federal income tax refund.

Now you can:

Direct deposit your refund into a single account
Receive your refund in a paper check
Split your direct deposit refund among two or three accounts, with up to three different US financial institutions
Deposit some of your refund into one or more accounts and receive the rest of your refund in a paper check.

Splitting your refund will not cause a delay. In fact, because the IRS uses direct deposit technology, your funds will be in your account(s) faster than if you opt to receive your refund in a paper check.

Taking advantage of the new option is easy. Tax filers who wants to direct deposit into more than one account must use IRS Form 8888 to indicate which accounts and in what amounts they would like their refunds disbursed. Any account in the taxpayer’s name with an account number and routing number can receive part of a federal tax refund. Tax filers can complete this form or ask their tax preparers to complete the form as part of their returns.

Splitting your refund provides a convenient option for managing your money, along with the speed and safety of direct deposit. This option allows you to spend some of your refund on immediate needs, while saving some of your refund for emergencies, a major purchase–like your first home–or your family’s future.

Kick start your down payment savings
This may be a good time to start an Individual Development Account, or IDA. These special savings accounts typically provide a cash match for savings up to $2,000. Every dollar saved may be matched with an additional dollar or, in many cases, $2. For example, an individual who saves $2,000 may receive a $4,000 match. The accounts can be used only for specific purposes, including the purchase of a first home. Funds can also be used for post-secondary education or the startup or expansion of a small business. Eligibility is restricted, in many cases, to individuals who meet income guidelines.

Donna Taglianetti is the executive director at Co-Opportunity in Hartford, CT. She can be reached at donnat@co-opportunity.org or 860-236-3617.