THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: SATURDAY, June 25, 1994 TAG: 9406240425
SECTION: REAL ESTATE WEEKLY PAGE: 04 EDITION: FINAL
SOURCE: Stories by Kathleen Butler, Special to Real Estate Weekly
DATELINE: 940625 LENGTH: Medium
The Virginia Beach house, a federally acquired foreclosure, was run-down and filthy, Hutson recalls. Swarms of fleas attacked the ankles of anyone who walked inside.
{REST} But for Hutson, 46, the $35,800 home had potential.
``When I came in,'' she says, ``all I could see were the possibilities.''
Today, with the help of a $15,965 home-improvement loan from the Virginia Housing Development Authority, Hutson is turning the townhouse into her dream home.
Since April, she has replaced the townhouse's leaking roof and rotted shingles. A fresh coat of black paint trims the home. A wall has been knocked down, a new fence put up. More improvements are on the way.
With an interest rate of 6.75 percent, Hutson makes loan payments of $125 a month. Combined with her $337 monthly mortgage payment, she pays less to own a house, she says, than many tenants do to rent one.
Each year, the state housing authority provides loans of up to $25,000 to Virginia residents like Hutson who want to make their homes more livable. South Hampton Roads' cities offer similar programs.
Like other VHDA mortgages, the home-improvement loans are designed for low- and moderate-income families. Typically ranging from $1,000 to $25,000, they are repaid in monthly installments over a set period of time - from six months to 20 years.
``We think the flexibility of it, and the fact that we'll work with you for up to 20 years, are the key selling points,'' says Mike Anderson, an authority spokesman.
To get a loan, an applicant's yearly income cannot exceed 120 percent of the median household income in Hampton Roads, Anderson said. For a family of four, the median income is $39,900, based on figures from the Department of Housing and Urban Development.
The loan's have an interest rate of 6.75 percent. Borrowers must also pay an annual insurance fee of 0.5 percent of the loan amount. On a $1,000 loan, the yearly payment is $5.
Borrowers must use some of the loan money for an energy-saving measure, such as weather-stripping, insulation or storm windows, Anderson said. Other than that, the loans can fund most improvements that better the basic livability of a house.
The loans can also be used for repairs needed to make the house meet local, county or state housing codes, he said. The money cannot be used for more cosmetic improvements, such as adding a deck.
Applicants must have at least half ownership in the property that they plan to improve. Mobile-home owners may also be eligible if their dwelling is on a permanent foundation on their own land.
For Hutson, just buying a home was a dream come true.
Less than two years ago, Hutson filed for bankruptcy, a move that could have ruined her chances of getting a mortgage. By buying a HUD home, Hutson says, she had little trouble getting either the mortgage or the 20-year home-improvement loan.
Hutson applied for the loan in March, about eight months after buying the home. The state authority approved her application on April 16. She received a check on April 29 and began remodeling the next day.
``I put the deposit in and went right out and started buying,'' she says.
Today, the carpet and flooring have been pulled up from most of the house. Boxes of new appliances - a microwave/convection oven and a range - are ready to be opened.
The downstairs bathroom now boasts wood trim and linoleum flooring. Pastel paint has replaced the layers of weathered wallpaper.
The money is going fast, but Hutson says she's been lucky along the way. Her younger son, who also lives in the townhouse with his wife, is a dry waller; her older son owns a home-improvement company. As a result, the family has been able to do almost all the work themselves.
Hutson's next priority is finishing the nursery for her first grandchild, expected in September.
``This is all coming out of my head,'' she says. ``I think the good Lord is putting ideas in there.''
by CNB