Yes – you read the title correctly. The Houston City Council wants to pay off credit card debts so that certain people can buy homes. Full story here.
Houston taxpayers could start footing the bill to help first-time homebuyers pay off debts and improve their credit scores, under a proposal before City Council this week.
The “Credit Score Enhancement Program” will give up to $3,000 in grants to individuals who are trying to qualify for mortgages through the city’s homebuyers assistance program. City officials say some applicants fall short of eligibility by only 10 or 20 points on their credit scores, and paying off some debt balances can quickly improve their numbers.
And it gets worse…
The city has three programs that provide grants for down payments and closing costs for qualified homebuyers. The most generous one offers a $37,500 grant to buy a home that costs $135,000 or less, but only in certain disadvantaged Houston neighborhoods the city is trying to revitalize.
The local housing groups chime in:
Affordable housing advocates were cautiously optimistic about the proposal Monday. The tightening credit market has made it harder for previously qualified families to get mortgages, said Stephan Fairfield, president of Covenant Community Capital Corp., a Houston nonprofit that helps low-income families build assets.
Some banks previously had accepted credit scores of 580 or 600 as a qualifying threshold, but most are now requiring 620, Fairfield said.
“New tools are needed to help families move forward towards home ownership,” he said. “If there are lenders that are offering loan approvals subject to retiring the outstanding payables, or if there is something that can help them get over the credit score threshold, it certainly makes sense.”
Is this a joke? THIS IS HOW WE GOT INTO THIS MESS TO BEGIN WITH! If you can’t manage to pay your credit card bills then just how are you going to make your mortgage payment?