I remember thinking it was odd when people congratulated me a year ago for buying a house. They were happy I was going way into debt, I thought. That was the time when many people still thought homeownership was an American right.
A year later, the rhetoric has changed. I now hear more people saying homeownership is a choice that should be made carefully and isn’t feasible for everyone.
When I was doing some research for the main story on this page, I came across some information I had never heard about the Federal Housing Administration. Congress created the FHA in 1934 when the housing industry was “flat on its back,” according the FHA.
Two million construction workers had lost their jobs.
Mortgage loan terms were limited to 50 percent of the property’s market value, with a repayment schedule spread over three to five years and ending with a balloon payment.
America was primarily a nation of renters in 1934, according to FHA. Four in 10 households owned homes.
Over the years, the FHA worked to stabilize the housing market and make homeownership affordable and attainable.
By 2001, the nation’s homeownership rate hit an all-time high of 68.1 percent.
The country again is faced with similar housing challenges and the federal government is working to get first-time homebuyers into the market. Several programs have been launched.
In the nature of full disclosure, I’ll tell you that I took one of the federal incentives – not the tax credit that’s currently available but the no-interest loan that was offered last year.
If you are in the same situation I was last year and you are trying to decide whether to buy or rent, Zell Long with the Neighborhood Development Corp. has a lot of good advice. She offers a free homebuyer’s course, and she gave me a few highlights last week.
Most importantly, she said, you need to make sure you are in a financial position to buy a house. Don’t go from one lender to the next until you find someone who will give you money. If you are getting turned down because of a credit problem, get it fixed and then go back to the lender. You usually will get better mortgage terms.
You have to look out for yourself. Ben Kilman, the first-time homeowner pictured with his family on this page, offered that advice to other people looking at entering the housing market. He said that as a family practice resident at the Northeast Mississippi Medical Center Family Residency Center, he qualified for a larger loan than he needed.
“It’s often tempting to buy more house than you can afford,” he said.
Zell said the same thing.
“They’ll get you in the house, but you want to stay in the house … Look at what’s best for you. If you know you are a person who does not like to do maintenance – change lightbulbs or do yard work – renting might be the option for you. If you want to have control of the paint color, owning might be the right option.
“It’s more expensive to be a homeowner, but you can claim it on your taxes … Homeownership is the easiest way to build wealth. But you have to live within a budget. It’s all about being disciplined.”
Contact Carlie Kollath at (662) 678-1598 or firstname.lastname@example.org.
Carlie Kollath/NEMS Daily Journal