The V.I. Senate Finance Committee on Thursday approved a bill that, if approved by the full Senate and signed by the governor, would help working-class residents of the territory become first-time homebuyers.
If it becomes law, the First-Time Homebuyers Program would be administered through the Virgin Islands Housing Finance Authority and help homebuyers with the initial 20 percent down payment that mortgage lenders expect buyers to possess before qualifying for a mortgage loan.
The bill came as a response to a committee hearing in April at which falling home-ownership rates caught the lawmakers’ attention.
Sen. Kurt Vialet, who proposed Bill No. 34-0060, said if the U.S. Virgin Islands wants to retain and attract working-class professionals, then job creation and home-ownership opportunities were paramount.
“One of the attractions to a jurisdiction is the ability to have a good job and the ability to be able to own a home,” Vialet said. “We have lost a number of professionals, teachers, nurses, and other professionals because of the lack of home ownership opportunities or because of the difficulty in which those individuals are able to qualify as a first-time homeowner for a loan.”
Though applicants may have the capacity and ability to repay a mortgage loan, Vialet noted that a $300,000 loan would require a $60,000 (20 percent) down payment, and “most individuals just do not have the $60,000 sitting in their account.”
If the bill becomes law, applicants could apply to the bank or lender of their choice and to the Housing Finance Authority. The Housing Finance Authority would review the loan application and supplement – in the form of a loan – all or a portion of the down payment required.
The homeowner would be required to pay back the Housing Finance Authority for the loan received on the portion of the down payment. Under the legislation, an initial appropriation from the Internal Revenue Matching Fund fund the First-Time Homebuyer’s Program, and the proceeds from the repayments would create a revolving fund, Vialet said.
He added the revolving fund ensures the government has the means to assist new homeowners on an annual basis, whereas before “there was not sufficient funding for the Housing Finance Authority to make this a reality.”
Virgin Islands Housing Finance Authority Director Darryl Griffith said the authority fully supports the legislation.
“The much-needed funding will go a long way in assisting moderate-income individuals in realizing their dreams of home ownership,” Griffith said.
Not only would the legislation enact and initially fund the First-Time Homebuyer’s Program, Griffith said it would also allocate funds towards the authority’s homestead program, which hasn’t been funded since 2008 after the program was transferred to the authority from Housing Parks and Recreation.
Should it be funded, the Homestead Loan Program would provide residents with mortgage assistance to purchase or build their first home. The program would also assist would-be property buyers acquire land to build a first home and allow existing homeowners loan opportunities to repair their primary residence.
The committee members voted to forward the legislation to the Committee on Rules and Judiciary for additional review.
Sens. Vialet, Donna Frett-Gregory, Marvin Blyden, Samuel Carrion, Dwayne DeGraff, and Janelle Sarauw were present for the hearing. Javan James Sr. was absent from the vote. Additional non-committee members were also present.