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Low prices enable an American dream

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BY KEVIN WIATROWSKI

THE TAMPA TRIBUNE

Published: January 30, 2009

DADE CITY - The major banks are a mess. Housing construction has nearly stopped. A flood of foreclosed homes has driven prices to rock-bottom levels.

In other words, say real estate experts, now is the perfect time to buy a house.

"The price points have come down to the point where homes that would have been too expensive two to three years ago are affordable now," said Ralph Cumbee, Pasco's regional president for First Community Bank of America.

There are some caveats, though. Buyers need excellent credit and a chunk of change for a down payment. For those who come up short in that respect, help is still available to close the deal.

And deals are still being made.

Adam Timer made one just before Thanksgiving, when he bought his first house on the south side of Dade City, despite working and going to school full-time at the University of South Florida.

David and Chelsea Gordon, an East Pasco couple, hope to close this month on their first house, in time to decorate the nursery ahead of the birth of their first child.

Timer and the Gordons are proof that the current housing market - even as it makes many homeowners weep for their lost equity - has created ideal conditions for people who have been waiting to buy their first homes. Falling prices, a glut of existing houses and historically low interest rates are encouraging people previously priced out of the overheated market to jump in.

It's hard to put a figure on exactly how many first-time buyers are out there. Real estate agents don't track those figures, said Marla Martin, spokeswoman for the Florida Association of Realtors.

The U.S. Department of Agriculture, however, does.

The USDA's Rural Development loan guarantee program helped Timer and the Gordons buy their houses. Both qualified for 100 percent financing on private loans co-signed by Uncle Sam.

About 90 percent of the program's loan guarantees go to first-time buyers, said program spokeswoman Dane Henshall.

The program aims to help people in rural areas buy houses. It guarantees as much as 100 percent of a house's purchase price.

In Fiscal Year 2008, which ended Sept. 30, the USDA backed more than 2,000 home loans in Florida, 1,716 of them for first-time buyers. Those figures were nearly triple the previous year's count.

Nationally, the USDA program grew from 35,322 loan guarantees in 2007 to nearly 63,000 last year. In the last three months of 2008, the program guaranteed 22,187 loans nationally and had already backed more than 1,000 loans in Florida, Henshall said.

"With the housing market as it has been for the last 18 months, what used to be the agency of last resort has become the go-to home lender," Henshall said.

Cumbee said programs such as the USDA's gives people with good credit but no large down payment a chance to get into a home. The program's only open to people who don't currently own property, making it attractive to first-time buyers, he said.

"These kids have good credit. They have good jobs," Cumbee said of Timer and the Gordons. "They're not getting in homes they can't afford. They're getting into homes they can afford."

Cumbee made Timer and the Gordons their loans at a time when his bank is seeing a quarter or less of the loan applications it did three years ago.

"Now, it's people who really want a home who are finding the deals," Cumbee said.

Timer, 27, a pharmacy technician at a drugstore, is studying marketing full-time at USF. At a time when many of his friends are still living in apartments, Timer said buying a house has been on his to-do list for several years now.

He bought his yellow clapboard house, a former foreclosure, just before Thanksgiving for $85,000. That was nearly half what the previous owner paid, county records show.

"It's been a dream of mine to be a homeowner," Timer said. "It's real nice to have something that's yours."

Timer's looking ahead to finishing his marketing degree and possibly leaving the area to find work. If that happens, he expects to sell or lease his house as an investment.

The Gordons, 23 and 21, also are buying a foreclosed home.

After getting married in June and with a baby boy due next month, the time seemed right to buy a home.

"It needs some work," David Gordon said. "But my family's been around carpentry for a long time. So fixing up the house is not big deal for us."

The Gordons lived with David's parents for a while to save up a down payment - money they'll now put toward repairs and a nursery.

It took a couple of tries to find a home they could afford, he said.

"We got approved at one rate, but everything we offered on was rejected," he said.

Eventually, they struck a deal with the bank that took back the three-bedroom house they're buying.

"It's a great area," Gordon said.

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