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By Wes Bunch

Now that banks and government agencies have enacted new programs to assist first-time homebuyers, many Hispanics in Northeast Tennessee are finding that owning a home may be easier than they first imagined.

A study by the Congressional Hispanic Caucus Institute credits the growth of Hispanic homeownership in the United States to lenders that have introduced flexible mortgage plans, increased homebuyer education and set up home-ownership assistance.

If these trends continue, the study said, more than 60 percent of Hispanics will own a home by 2010.

Bank of Tennessee is one lender that is taking steps to reach the growing Hispanic community, said Diego Igle¬sias, relationships manager for the bank’s office near East Tennessee State University in Johnson City.

“We realized there was a seg¬ment of the community that was not been taken care of,” said Iglesias, an ETSU gradu¬ate and native of Argentina. “It doesn’t have to be Hispan¬ics; it can be anyone without a credit history. We thought it would be a good idea to try and help them out.”

Bank of Tennessee offers non-traditional loans to first-time homebuyers with little or no credit history.
Home buyers who qualify for non-traditional home loans usually can take advantage of one of two federal grants dis¬persed by the bank, according to Iglesias.

Clients who meet the grant requirements can receive up to $9,500 to cover closing costs, depending on whether they receive the American Dream Homeownership Challenge grant or the Welcome Home grant.

Iglesias hopes these pro¬grams will help the area’s Hispanic community become more open to dealing with banks.

“Most Hispanics, they don’t think they can receive any kind of help,” Iglesias said. “They come from countries where they build their houses with their work, penny by penny and dollar by dollar.

“They aren’t used to go¬ing into the bank and getting a home loan. Plus, they have mistrust issues with banks. Many times they do not feel well-received at a bank.”

To address that issue, Bank of Tennessee — which also has a location in Erwin — started a Hispanic Market division to break down language barriers that might cause some of that distrust. Iglesias coordinated a visit from the Mexican con¬sulate to help Mexican immi¬grants secure the paperwork needed to begin the home-buying process.

Bank of Tennessee also requires recipients of non-traditional mortgages to attend homeowner education courses where they can learn to head off problems with their first house.

For Iglesias, the bottom line is helping potential buyers find the home and mortgage best suited for them so they can be happy with their new home.

“We don’t just throw products at people here,” Iglesias said. “We ask questions, gather information and then we make a decision on what product would benefit the customer the most. We go case by case, and depending on the customer needs, we choose the product we feel best meets those needs.”

Carmen Acevedo and her husband, Daniel Arela, decided five years ago that a non-traditional mortgage from Bank of Tennessee met their home-buying needs.

Acevedo, a hair stylist and mother of two from Erwin, received a $7,500 Welcome Home grant from the bank to cover her down payment. The couple also attended the required homebuyer education classes so they would now what to expect with their new house.

“We had to go to two classes where they talked about the ups and downs of being a homeowner,” Acevedo said. “Owning a home is supposed to be a good thing, you don’t ever think about the bad.”

Avecedo was born in Florida and spent much of her youth traveling, as her parents were migrant workers. Because of her experience, she knew the importance of having a place for her family to call home. She said they would have bought a house eventually without the assistance they received, but conceded the programs offered by the bank helped it come to fruition sooner.

Though many choose to deal with a traditional lending source when securing a mortgage, others, like Wilbert Sanchez, a roofer who moved to Tennessee from his home state of Colorado, decide to pursue another route.

After hearing about first-time home-buying assistance offered by Eastern Eight Community Development Corp., a non-profit, and the U.S. Department of Agriculture’s Rural Development office in Greeneville, Sanchez decided to get a home loan from them.

Eastern Eight gave Sanchez 75 percent of his mortgage with no interest for 30 years. Rural Development gave him the remainder at 5.5 percent interest for the same amount of time through its Section 502 program.

According to Sanchez, this assistance allowed him to stop renting and purchase a home.

“I think everything worked out great, they helped me as much as they could on everything,” Sanchez said. “They did an excellent job.”

Sanchez also was required to take a homebuyer education
class, and like Acevedo, he is glad he did.

“I loved the class,” Sanchez said. “People think that if you have the money, you just go out and buy a home. It’s not like that. If you take the class, they explain everything to you.”

Programs offered to first-time buyers are not without their shortcomings, however. In Sanchez’s case, the process took almost nine months because his Jonesborough home was a new build. He also is responsible for two mortgage payments every month for the two separate loans.

Another problem is lack of publicity: Sanchez learned about the programs through word of mouth. Despite those inconveniences, he is grateful he found the means to purchase his first home.

“It did have its drawbacks along the way,” Sanchez conceded.
“But when you get help like this, you can’t complain.”

NINE STEPS TO BUYING A HOME

(1) Figure out what you can afford. What you can afford depends on your credit rating, monthly expenses, the down payment and interest rate.
(2) Know your rights.
Educate yourself about borrower’s rights, predatory lending, the Real Estate Settlement Procedures Act.
(3) Shop for a loan.
Save money by doing your homework. Talk to several lenders, compare costs and loan rates, and negotiate for better a deal.
(4) Learn about home-buying programs.
Programs offered by banks and government agencies can offer lower payments and are designed to benefit first-time homebuyers.
(5) Shop for a home.
Consider finding a real estate agent, make a wish list of features you want your home to have, use a home shopping checklist. Look into alternative forms of housing, or research building a new home.
(6) Make an offer.
Discuss the process with a real estate agent, if you have one. If the seller counters your offer you can negotiate the terms of sale.
(7) Get a home inspection.
Make your offer contingent on a home inspection. This way you can find out about the home’s condition and avoid buying one that needs major repairs.
(8) Shop for insurance.
Lenders require that you have homeowners insurance. Be sure to shop around for the best price.
(9) Sign papers.
The last step. Now you’re ready to close on the house. Just make sure to read everything before you sign.
_{Source: U.S. Department of Housing and Urban Development}