The state's plans to stoke the housing market with down-payment assistance have hit a bureaucratic wall.

South Florida housing agencies say the money arrived late and demand for the grants from home buyers has been weak.

In addition, the process has been complicated by a looming federal tax deadline, which changed last week when the federal tax credit for home buyers was extended to April 30.

``Unfortunately, it's not going as well as we'd hoped,'' said state Sen. Mike Fasano, R-New Port Richey, who sponsored the legislation for the Florida Homebuyer Opportunity Program. ``It is our understanding that there are so many people who would qualify but are unaware of it.''

State legislators wanted to advance up to $8,000 to first-time home buyers across the state who qualify for a federal tax credit. Rather than wait until they file returns, home buyers would get cash as they buy their homes.

Legislators allocated $30 million to the program but, so far, only $2 million has gotten into the hands of home buyers, according to the latest estimates.

Some said the extension of the federal tax deadline could allow more people to take advantage of the program.

Edith Bynes, an affordable housing specialist at BankAtlantic in Fort Lauderdale, said she thinks the extension will bring in more buyers who will apply for the state loan program. Bynes has helped one home buyer to make that application.

``It's the individuals who do not have their down payments and need some closing costs. This is perfect for that individual,'' she said.

The state Florida Housing Finance Corp. says it has sent $25.8 million of the allocated $30 million to local governments through the end of September. Its next report, it said, would be available at the end of November.

Edward Lowery, Palm Beach County's director of Housing and Community Development, said he also is disappointed with the program's progress.

After establishing the program, training employees, advertising on his department's website and in newspapers, fielding dozens of calls and holding a daylong information session, the department has received only three applications.

The problem: Home buyers didn't understand this was a loan. ``A lot of prospective applicants are really disappointed that this money has to be paid back,'' he said. ``They were hoping that it would be a grant.''

The Florida Homebuyer Opportunity Program, which took effect in July, wasn't funded at the start. Some local housing agencies, including the one for the city of Fort Lauderdale, still didn't have any funds by the start of September.

Because the funding arrived late, prospective home buyers were under pressure. To qualify for the federal tax credit, a first-time home buyer had to purchase a home by Nov. 30. Without knowing when or if the state funds would be available, some home buyers passed up the program and found other ways to make their purchase.

In Fort Lauderdale, the process of applying for the state loan includes providing six weeks of paycheck stubs, a recent tax return, three months of bank statements for all accounts for every member of the household and statements about the cash value of all assets for anyone in the household. That's in addition to finding a home, getting a bid accepted and providing proof that the mortgage has been approved and the property is insured.

In Fort Lauderdale, city spokeswoman Petula Burks said the city had ``an overwhelming response'' when the program was announced, but she was unable to say how many loans had been made or applications taken.

The city, which did not have any funds available in early September, has now received $140,000.

Until last Friday, buyers were rushing to beat the original Nov. 30 deadline.

Michelle Carter-Page made plans to close on her first home in Riviera Beach on Nov. 20, just to be ahead of the original deadline.

``I was in the middle of trying to rent somewhere when I found out about tax credit,'' she said. Carter-Page said she and her husband will be leaving some of their rental deposit money behind, but they think it's worth it to provide a stable home for their children and to take advantage of the tax credit.

Fasano said the money home buyers repay to the program will be recycled, to be loaned out to other borrowers ``until the federal tax credit no longer exists or the end of the fiscal year [June 30.]''

On Friday, President Barack Obama signed into a law a measure that extends the tax credit deadline to April 30. If a home buyer has a home under contract by April 30, the buyer has another 60 days, until the end of June, to close on the home.

Mary Shanklin of the Orlando Sentinel contributed to this report.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@