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The Bush Children.

Once upon a time, Dot Hollingshead fell through the floor of her crumbling mobile home. Soon after, she moved into a new house of her own thanks to the Alabama Housing Finance Authority's partnership with Habitat for Humanity.

Dot's story may not be quite a modern-day fairy tale, but for thousands of Alabama families, a basic, decent home truly is a castle. For this reason, we work to ensure that young couples can afford their first home. They offer low interest rates and down payment assistance so overcrowded households can find breathing room for their large families. They build apartments so single parents can find a decent place for their young children and so elderly renters can have safe accessible dwellings. AHFA, located in Montgomery, has helped more than 78,000 families find better housing since1980.

HOMEOWNERSHIP PROGRAMS

Step Up Home Loans
Montgomery's Sheri Fitzgerald learned the benefits of AHFA's Step Up program firsthand when she decided to take her own advice to potential buyers: "At least go find out what is there. There's lots of opportunities and lots of people willing to help."

The program offers 100 percent financing on 30-year, fixed-rate mortgages to buyers whose incomes can sustain a market-rate mortgage but whose savings fall short of the amount needed for entry and closing costs.

"We all want homes in a secure place," Sheri said. "We feel much safer now, and I'm so thankful."

Mortgage Credit Certificates
Chris Griswell of Montgomery bought his first home when an acquaintance requested his pest control expertise. When he arrived at the house to combat an ant problem, Chris found a "For Sale" sign and the homeowners found a buyer. Chris not only obtained low-interest financing and down payment assistance through AHFA's Step Up program, but also received a tax credit through the Mortgage Credit Certificate (MCC) program.

MCCs provide a dollar-for-dollar reduction in federal tax liability worth 20 percent of the interest paid on a mortgage each year. By reducing the income tax owed, MCCs give potential home buyers more available income to qualify for a mortgage loan.

First Step Home Loans
Wilkinson Homes is a neighborhood of former rental houses operated by theSelma Housing Authority. Today, these houses are for sale to the residents.When she closed her First Step loan to purchase the home she had rented for five years, Martha Heard became the first to take advantage of the subdivision's conversion to homeownership.

Thanks to pre-purchase counseling and down payment assistance, Martha’s transition from renter to owner has been easy. With a mortgage payment less than her rent, she is relishing new opportunities for landscaping, remodeling and pet ownership.

The First Step Mortgage Revenue Bond (MRB) program offers lower-than-market mortgage interest rates to first-time and lower-income home buyers. To fund this program, AHFA sells tax-exempt bonds to investors. Proceeds are used to purchase mortgages from a statewide network of participating lenders, providing them with funds to loan to home buyers. The low-interest loans are available with 30-year, FHA, VA, Rural Development or conventional mortgages.

Cindy Ryals & Children

Rural Alabama Mortgage Program
Each day as she dropped off her daughter at day care, LaSandra Kilow saw the house on Ozark's Dixie Drive four houses down and imagined living inside. Now, thanks to an innovative financing program from AHFA and USDA Rural Development, she doesn't have to wonder any more. The Rural Alabama Mortgage Program (RAMP) is designed to increase homeownership in the Black Belt and other rural Alabama counties.

AHFA finances half of the purchase price of each home, with RD providing a subsidized second mortgage for the remaining half. AHFA also provides up to $2,000 in down payment assistance for home buyers' prepaid items and other out-of-pocket expenses. RAMP mortgages are conventional, 30-year loans, and all borrowers must complete homeownership counseling prior to loan closing.

Habitat for Humanity Loan Partnership Eight was more than enough for Frederick and Veronica Bush and their six children renting a two-bedroom mobile home. The Anniston family was anxious to escape the lack of insulation and locking doors, raw sewage in the yard and continuous plumbing problems. When their application was approved by Habitat for Humanity of Calhoun County, Frederick and Veronica began accumulating the required sweat equity hours at other houses under construction and soon moved into their new four-bedroom home.

Through this partnership, AHFA purchases loans from Alabama's Habitat affiliates. This process allows the affiliate to receive the loan money up front in a lump sum while AHFA receives the monthly payments for the life of the loan. The affiliate then uses the up-front money to build more housing for low-income families.

American Dream Downpayment Initiative
Through economic ups and downs, AHFA strives to maintain a steady presence in the marketplace with a variety of programs. Fall 2004, AHFA reduced out-of-pocket expenses for first-time home buyers with lower incomes through the American Dream Downpayment Initiative (ADDI). AHFA's ADDI assistance is $10,000 in interest-free funds used to reduce the first mortgage loan's principal balance.

RENTAL PROGRAMS

Low-Income Housing Tax Credits
The road to Bernadette McNair's Birmingham apartment is paved with used-to-be's. She used to be a prostitute, a drug addict and homeless. When she reached her lowest point, her cry for help was answered by Aletheia House, a substance abuse rehabilitation center which also provides affordable housing through Avondale Gardens, financed by Low-Income Housing Tax Credits (LIHTC). When construction began, Bernadette was first to apply and first to move in.
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From her doorstep, Bernadette now sees the path to a future she never envisioned. Now she's in school to complete her GED, building a life and family with her husband, and working part-time at Aletheia House, passing forward the kindness she was shown.

AHFA's housing credits help developers buy land or buildings and build or repair housing to be rented to low-income families at affordable rates. This financial incentive, a dollar-for-dollar reduction in federal tax liability, encourages business interests to increase the supply of rental housing for economically disadvantaged families.

HOME Investment Partnerships Program
HOME, a federally funded program, provides participating jurisdictions like Alabama with allocations used by developers to buy, build or repair affordable housing.

The HOME-funded Houston Place Apartments were designed with serenity inmind. Their 24 units are reserved for Willie Foster and other clients of East Central Mental Health Center. From her front porch, Willie can watch for some of her 13 grandchildren as they come to spend afternoons with her. "I call this my little castle on the hill," said Willie. "I'll be here 'til the good Lord takes me home."

Multifamily Bonds AHFA also provides financing for multifamily housing through multifamily bonds, which offer developers lower-than-market interest rates in exchange for reserving a portion of their units for tenants earning less than the local median income.

Blackwood Estates, a 56-unit complex financed with multifamily bonds through AHFA, was the perfect fit for Cindy Ryals. The native Texan recently moved to Loxley, the "Little Town with a Big Heart," and hasn't regretted it. "I like living here," said Cindy. "It's quiet and a good place to raise my children."

These families represent AHFA's true measures of success. For nearly 25 years, they've provided these benefits and more to our state's families with modest incomes. For more information, call AHFA at 800/325-2432 or visit www.ahfa.com