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Hundreds of potential homebuyers filled the Phoenix City Council chambers Monday night, for details on a new program offering thousands of dollars towards the purchase of a foreclosed house.
The program will award homebuyers $15,000 dollars if they buy a foreclosed single family home, townhouse or condominium within Phoenix city limits.
"Very good program," said Rod Shelton, a potential homebuyer. "At least they're doing something to stimulate the economy in the foreclosure market."
To qualify, homebuyers must be deemed creditworthy by the Federal Housing Administration.
Potential buyers must also complete a mandatory eight-hour counseling session on home ownership.
The purchase contract must meet four criteria including a sales price of the home at least 15 percent of its appraised value.
"You are going to have 1000 people who will qualify but you won't find 200 homes that will qualify," said real estate agent David Braudrick.
Additionally, potential homebuyers can only earn up to 120 percent of the median income in their area. For a breakdown of income limits by family size, click here.
"For the buyers buying under 200k, it probably means a lot to their taxes," said real estate broker Chris Campbell. "They probably file short form and don't have any tax credits at all."
Homebuyers have to repay the full amount of the loan if they ever sell the home or refinance and must invest a minimum of $1,000 dollars of their own money in the house.
The City of Phoenix currently has enough money to award the $15,000 dollar loans to 188 families but could expand that number in the near future.
"If it helps nearly 200 families in the City of Phoenix become homeowners, it's a great thing," said realtor Paula Eggleston.
