TUSCALOOSA, Ala. -- Tuscaloosa CU is backing a program to help home buyers with poor credit realize their dreams of home ownership, following the departure of the big banks from the local mortgage market.
After the mortgage rules changed, the second and third mortgages attached to the four homes prevented the banks from selling the loans on the secondary market. The Tuscaloosa Housing Authority coordinated $40,000 of the funding: $15,000 from THA and $22,000 from the city which comprise the second and third mortgages.
As long as the resident remains in the house five years, the $15,000 is forgiven; 15 years, and the $22,000 is forgiven. With a value each of $110,000, that leaves $70,000 to be financed at 6% for 20 years.
Borrowers must undergo an eight week home ownership course and have a $1,000 deposit.