Roger136913
Topic Author
Posts: 461
Joined: Fri Aug 12, 2005 1:19 am

Affordable Housing Idea?

Thu Feb 02, 2006 6:29 pm

Why can't the Federal government or a State provide Affordable Housing?

1) Build condos or town-houses

2) Selling price goes by annual income

3) Mortgage payments are based on 30% of the income monthly

4) Said property can not be resold into a public real estate market, it is only sold back to the State or Goverment for the price that was paid for it. You get only the difference that was paid from the next buyer, buying it.
5) All loans are based on a 5% interest rate.

6) Mortgage payments can not go up, unless your income goes up by more then 20%.

7) A tax credit for $1,000.00 per year for those who stay every year per household.

I know it might sound stupid, but by making condos or town-houses and it being funded on a Federal or State level, they would make up for it in Mortgage payments. The State wins by having property taxes, and the taxpayers would be given a break by not having Welfare or Section 8 have to pay some of the rents some places demand like say a hotel for a family at over $2,000.00 per month.


Place a cut off as in who can apply and who can't. Maybe base it on total income and then family members? This is something I would not know about.

Instead of building housing projets where some are just trashed as soon as they are put up, I am willing to bet they would stay cleaner as they would be owning it?

Any ideas?
 
whitehatter
Posts: 5180
Joined: Sat Jun 12, 2004 6:52 am

RE: Affordable Housing Idea?

Thu Feb 02, 2006 6:46 pm

Forget it.

The wingnuts will scream about using tax dollars for social engineering or class warfare. Besides which, why sell the housing? The State may as well as rent it out as rental often exceeds mortgage payments.

That's why people buy to let.
Lead me not into temptation, I can find my own way there...
 
Roger136913
Topic Author
Posts: 461
Joined: Fri Aug 12, 2005 1:19 am

RE: Affordable Housing Idea?

Thu Feb 02, 2006 8:12 pm

Quoting WhiteHatter (Reply 1):
Forget it.

The wingnuts will scream about using tax dollars for social engineering or class warfare. Besides which, why sell the housing? The State may as well as rent it out as rental often exceeds mortgage payments.

That's why people buy to let.

Why rent it out when you would have money paid back to the State of Federal Government in a Mortgage payment?

If you rented them would that not mean Welfare and section 8 ?????? it would be just another housing project.
 
whitehatter
Posts: 5180
Joined: Sat Jun 12, 2004 6:52 am

RE: Affordable Housing Idea?

Thu Feb 02, 2006 8:21 pm

Britain did something different in recent years.

Social housing has been increasingly transferred to Housing Associations. These are not-for-profit organisations which rent out property, but can borrow on the open market to finance development. They also sell property on deals which include part ownership, where you buy a percentage of the home and rent the rest. The HA gets the half value when you sell it on. Similarly they use their muscle to build new housing and sell it cheaply to first time buyers and their existing tenants.

You need to take a look at social housing in general as you don't quite seem to have a grasp on what it is and how it works, or how it could be made to work better. Many people who are low-income could not obtain finance, which means that mortgages are out of the question or will be so risk-loaded that they are worse off. It is better to put social housing at arms-length from State sources of funding, but ensure those who need homes are catered for properly.

Just looking at it from a balance sheet defeats the object. Social housing is for those who cannot buy, so forcing them into mortgage arrangements can just push them further into poverty and leave the State with an even bigger financial headache when they default.
Lead me not into temptation, I can find my own way there...
 
Roger136913
Topic Author
Posts: 461
Joined: Fri Aug 12, 2005 1:19 am

RE: Affordable Housing Idea?

Thu Feb 02, 2006 9:14 pm

Quoting WhiteHatter (Reply 3):
You need to take a look at social housing in general as you don't quite seem to have a grasp on what it is and how it works, or how it could be made to work better. Many people who are low-income could not obtain finance, which means that mortgages are out of the question or will be so risk-loaded that they are worse off

This is why the State or Federal Government would offer a 5% Mortgage. All low income would be approved! It would be based on 30% of thier income just like a bank.

Example

A family of 2 (2 Adults) Working low income say McDonalds for Minimum wage here in Massachusetts at $6.75 and the other Adult working at say Walmart for the same wage. The McDonalds worker works 25 hours a week and the Walmart workers gets 40 hours.

$438.75 per week total
$22.815 for 52 weeks
$1901.25 based on 12 months.

Now take the average tax out 5.3 state and say 20% Federal
taxes would be $481.01 leaving them $1,420.24
Now take 30% of that for thier mortgage payment of $427.07 they would then have $993.17 left over. Of course they would have to have a diff Tax rate for property say half? I would say

Based on 30% the loan would be for about $90,000.00 over 30 years.


Better then saying here is a welfare check of $600.00 plus a section 8 grant of 80% of thier rent they would gain more by having the housing with a mortgage.

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