Program helps home buyers

Alicia Robinson

It won’t be a knockout punch, but Newport Beach hopes a new program

will deliver a few blows to home-ownership barriers in the city.

The public lease-purchase program will be explained in a workshop

Saturday. The programs allows qualified buyers to purchase a home at

a locked-in purchase price with no down payment or closing costs.

This is the first time the city has had a program to encourage

home ownership, though a requirement in the general plan has led to

development of a few homes and some rental units at moderate prices,

Newport Beach Assistant City Manager Sharon Wood said.

“Clearly we have very high housing (costs), and it’s hard for

people who work here to be able to live here, and especially to be

able to buy a home here,” she said.

The Orange County Housing and Finance Agency -- sponsored by

Newport Beach, Irvine, Buena Park and Placentia -- contracted with

Lease Purchase Solutions, a private for-profit company, to run the

public lease-purchase program.

Once a prospective home buyer qualifies for the program and finds

a home, Lease Purchase Solutions sells bonds to pay the down payment

and obtain a mortgage. The buyer makes monthly payments toward the

mortgage, and after a period of time the buyer can assume the

mortgage or get new financing to buy the house.

Participating cities don’t pay anything into the program, but the

multi-city agency technically owns the home and leases it to the

buyer.

The program is open to lower-income buyers, but it’s most

effective for families with moderate incomes who still can’t afford

the sky-high home prices in Newport or may have spotty credit, Wood

said.

“It’s not just for low and moderate income households but also for

a little above moderate,” she said. “That’s a group that there are no

other assistance programs for.”

The program can serve households earning up to 140% of the county

median income, which in 2004 was $105,000 per year, said Matt

Callahan, program administrator for Lease Purchase Solutions.

The amount the program will pay for a house is capped at $475,000,

Callahan said. That won’t go too far in Newport Beach, where the

median home price in December was $925,000, according to the

California Assn. of Realtors.

“In Orange County, particularly in Newport Beach [the cap is]

limiting us to the condo market, perhaps the townhome market,”

Callahan said.

While high prices will continue to deter some from home ownership

in Newport Beach, the public lease-purchase program may help others

get in on the ground floor and build up some equity, Wood said.

“It’s a very low-cost way for us to offer one way that people may

be able to buy a house here that they may not be able to afford

otherwise,” she said.

Interest in the program has been high in Irvine, where a workshop

was held recently, Irvine Associate City Planner Amy Urcis said.

“We had about a hundred people show up, so we did have a pretty

good turnout, and I get calls every day from people interested in

assistance in purchasing a home,” she said.

* ALICIA ROBINSON covers government and politics. She may be

reached at (714) 966-4626.