State works to continue housing recovery
By G. Michael Dobbsnews@thereminder.com
SPRINGFIELD The Patrick Administration is undertaking what was described as a "significant" effort to continue the Commonwealth's housing recovery.
Aaron Gornstein, undersecretary of the Department of Housing and Community Development and Barbara Anthony, undersecretary of the Office of Consumer Affairs and Business Regulation, were in Springfield on June 11 to announce the new effort as part of the first "Housing Week" as declared by Gov. Deval Patrick.
Gornstein explained the administration's Home Ownership Compact had a goal of providing 10,000 mortgage loans to first-time homebuyers over the next five years who are below the area median income.
Already six banks, two of which are statewide, have agreed to participate in the program, Anthony explained and more banks are expected to join the effort.
Gornstein noted this the first time this kind of program has happened in Massachusetts and he believes it is the first time any governor in the nation has set a goal for new mortgages.
Since 2009, Gornstein said the Patrick Administration has used $700 million in a combination of federal and state tax credits and subsidies to boost the Commonwealth's housing market. The result of these efforts has been 10,000 new units of housing and 14,000 jobs.
He added the Springfield has seen 1,000 units of housing and about 1,000 jobs.
The mortgages obtained under the compact will be "soundly underwritten," Anthony said, meaning the borrowers will be in a financial position to pay back the loans.
Gornstein said the program will be a boost for economy and that the housing market in the state "has turned the corner." Home prices are recovering from the 2008 recession he said and home sales are "very robust."
Anthony said that home prices have risen 4 percent over the same time last year and state officials expect the upward trend to continue. Foreclosure rates have decreased 75 percent, she added.
Gornstein explained that one reason behind the compact is to help keep young people and families here in Massachusetts.
He added the state is also supplying $1.3 million in grants to foreclosure prevention programs with $140,000 going to HAP Housing in Springfield. Gornstein explained that even with a drop in foreclosures "there are people still facing difficulties." He said the foreclosure prevention program work with both homeowners and lenders to keep them in their homes and to do "whatever is in the best interests of the homeowner."
Springfield, Gornstein said, has benefited from a collaboration of local nonprofit organizations such as Rebuilding Together in the improvement of its housing stock.