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Rate Update and SLO County FTHB Loans

Last week closed with a nice bond rally due to a weak Gross Domestic Product number and healthy demand for US Treasury securities. GDP, which measures the value of all goods and services produced within US borders, showed the economy fell at a 1% annual rate in the 2nd quarter, the fourth straight quarter of decline. The auctions got off to a rocky start, but China, in particular, showed strong demand for 7-year Notes, driving the benchmark yield down to 3.48%. China holds about $800 billion in US Treasury securities and is an enormous buyer. The 30 Year Fixed currently sits at 4.750% (4.929% APR) and the 15 Year Fixed is at 4.250% (4.557% APR). Jobless Claims and Unemployment data on Thursday and Friday will be the most anticipated news of the week.

The County of San Luis Obispo County Housing and Economic Development team offers the First Time Home Buyer Program to assist qualified low income families with down payment, mortgage and closing costs to purchase their first home within the County of San Luis Obispo. The program currently has $180,000 to provide FTHB loans, but they expect to receive another $140,000 in Federal funds in October and $150,000 from the CalHome program assuming the state is successful selling the necessary bonds.

The FTHB Program offers up to $55,000 to qualified low income families. Qualified four-person households may earn annual gross income of up to $70,800. The loan is considered a “silent second” because it requires no principal and interest payments until year 21, or until the home is sold or transferred. The loan is a 50-year fixed rate loan with principal and interest deferred for the first 20 years. The interest rate is fixed at 3%, and the loan will be amortized for the final 30 years. Qualified applicants are required to provide a minimum 2% cash investment into the home purchase.

Mortgage lenders are required to have completed the San Luis Obispo County’s FTHB training program in order to access the funds for qualified applicants. For more information, or to contact the participating lenders, visit the FTHB Program website… www.slocounty.ca.gov/planning/Housing_and_Economic_Development/fthbprogram.htm

Daniel Podesto
Central Coast Lending, Inc.
(805) 771-9870
dan@centralcoastlending.com

Written by Keith Byrd - Go to Keith's Website/Profile