Helping low-income buyers has its ups and downs

Housing officials in Washington, D.C. have historically helped low-income buyers make home purchases through subsidies. These efforts help increase housing opportunities for many Americans, but also sets the scene for foreclosures, liens and financial hardships if the homeowners cannot pay their monthly mortgage payment.

The Washington Post reported 20 percent of buyers participating in the city's loan program for the first time are already behind on their mortgage payments. The default rate for Washington, D.C. is at least three times higher than the rate for the region. Because the economy is so weak, many buyers receiving subsidies for home loans fall behind on payments if they are hit with a financial hardship or unemployment.

Through the program, many homeowners are able to acquire a home loan, but are not provided adequate financial education or guidance to help them make smart financial decisions. This can put many homeowners in distress. But the D.C. Department of Housing and Community Development also offers second mortgages with generous terms allowing buyers to stay in their homes even if they are living on a very tight budget, the source reported.

Similarly, the New Hampshire Housing Finance Authority is still working on putting low and moderate income families into homes, despite the practice contributing to the onset of the mortgage crisis. The Concord Monitor reports the authority plans to use public and private resources to help homebuyers find the best mortgage for their needs to help them get in a home.

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