Interest rates, federal program to help homeowners and buyers

FRESNO, Calif.

The average interest rate on a 30-year mortgage has dropped to 3.75 percent, and a new Federal program is easing requirements to buy.

For first time homebuyers, the climate can't get much better to buy.

With the help of mortgage insurers, prospective buyers with credit scores of 660 may be allowed to put as little as 3.5 percent down.

Even those with scores as low as 580 may be qualified to own a home.

"Unlike the last time they dipped, not quite this low, more people actually qualify because of some of the loosening of the guidelines as far as credit scores and debt ratios are concerned," California Funding Loan Officer Marc Navarro said.

Darius Assemi owns Granville Homes, and says the change in Federal programs is welcome news not only for those wanting to buy a home, but those looking to lower their payment by refinancing.

"You got the combination of low interest rates, and low home prices. We've never seen this combination in many, many decades. It creates an incredible opportunity and it's the best place to park your dollars," Assemi said.

Starting march 15th, a Federal program called the Home Affordable Refinance Program, or HARP, will allow some borrowers who are upside down or have little equity to refinance. The goal is to stabilize the housing market and boost the economy.

In many cases, some home builders say buyers can realize the dream of home ownership for about the same price they were paying to rent.

"There's a lot of people who could buy that aren't aware. And with 3 1/2 percent down, right now you are getting your income tax back you can actually take that money and purchase a home and a lot of times for not much more than you would pay in a deposit," Granville sales manager Michelle Brunn said.

Assemi expects sales for new homes will increase, and so will the outlook for many current homeowners facing what seemed to be a dismal future until now.

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