In the midst of the coronavirus (COVID-19) pandemic, the Puerto Rico Housing Department has received a total of 1,043 applications for the federal Homebuyer Assistance (HBA) program, of which 955 have been eligible, said P.R. Housing Secretary Luis Fernández Trinchet.
“Three cases have been closed, which have been three nurses and in the next two or three weeks we should be closing the next 20 cases, which are the ones that are quite close to their closing stage. It is very important to emphasize that the loan process is run in a cooperative or a bank and not in Housing, nor does it work in the Housing Finance Authority,” Fernández Trinchet affirmed.
Although there would be 932 pending applications -when subtracting the three cases already closed and the 20 that are close to completing the procedures- the secretary said that he does not consider the process to be a slow one. “I don’t think it’s slow,” he stated.
“For example, one of the cases that is closest to closing, the person files their application in the mortgage house on August 14 and it is not until September 28 that the appraisal is received, which is the second time that the information appears in the system. There are still some documents that the institution has to file so that the person can sign their case,” he said.
Pandemic Hinders Process
Although in this case 20 days elapsed from the moment the application was filed until the appraisal was received, Fernández Trinchet told THE WEEKLY JOURNAL that he does not consider it to be the fault of the financial institution, of the Housing Department, or of the Housing Finance Authority (HFA), but attributes it to the COVID-19 pandemic.
“We have a pandemic. How many appraisers are comfortable or comfortable going to visit a house or how many people are there who want to receive them? You also have to see which documents in a normal mortgage process are obtained faster or slower. There are institutions that are bigger than others, they have more employees, so honestly everything will depend on each institution,” he added.
With an allocation of $350 million in CDBG-DR funds, the HBA program provides financial grant assistance to families to cover the difference between the closing and early costs of the first mortgage obtained from a financial institution and the price of buying a home.
The program can provide up to $25,000 for low or moderate income families and up to $35,000 for low or moderate income families with members who are part of the essential recovery staff for the acquisition of a main home that does not exceed the current limits of Federal Housing Administration (FHA) mortgages nor the value indicated in the appraisal.
“This is one of the programs that can help with the housing problem in Puerto Rico. It could help 10,000 families. Interest rates are low right now,” Fernández Trinchet affirmed.
In terms of the procedure to be followed by the person interested in receiving the subsidy, he mentioned that the application to the program is made through a financial institution. The list of participating institutions is available on the CDBG-DR digital platform.
“So, a person who is interested in the program goes to one of them—cooperatives or mortgage houses—and says they want to participate in the program. There are typically two options when the person goes: one, that they already have an identified home, or two, that they don’t. Sometimes they simply go because they want to know if they are eligible for the program, they leave and eventually return with an already identified house that they want to buy,” the official said.
After that, the process of a normal mortgage loan begins. This information is sent by system to the HFA -which is the entity through which the P.R. Housing Dept. manages the program- to corroborate that the family or the person is eligible and determine if the subsidy they are giving the applicant is correct, explained Fernández Trinchet.