The Hope Resource & Researrch Center (THRRC) Family Joint Venture Mortgage Program:
The Family Joint Venture Mortgage Program (FJVM) is designed to help existing home owners keep their homes and to help home buyers purchase new or replacement housing without being disqualified due to the current turmoil in the finance industries, while building in affordability. FJVM will also support property values and stem the tide of falling housing prices!
How the Program Works:
The program is facilitated by THRRC who purchases properties or mortgages from lenders or municipalities. THRRC is able to provide low interest long-term mortgages to the existing home owner or the buyer. THC acquires the property and the home owner is given a new 40 year “Family Mortgage” at an interest rate that is about 1/3 less than what banks charge for 2/3 of the value of the property. THRRC retains a Joint Venture interest equal to 1/3 of the value. Since THRRC and the buyer are partners, THRRC purchases a Life Insurance policy, the cost of which is added to the monthly mortgage payment.
Since the mortgage is a 40 year term, the home owner’s children can be part of the joint venture. This provides an asset that the children can continue to enjoy should the home owner die or become incapacitated before the JV is closed. The Joint Venture continues through the holding period or until the property is sold. During the holding period, the home owner will receive the benefits of property appreciation.
The Benefits of The Family Joint Venture Mortgage Program:
- Provides an affordable way to buy a home. - Because of the reduced mortgage costs, a household making around $72,000 per year will now begin to qualify for a home that would normally require a family income of over $105,000 per year.
- Provides a cash flow that helps offset living expenses during the midpoint of the program. - The rebate that begins in Year 16 becomes an additional cash flow coming into the household.
- Provides a legacy for the family for years to come. - Since the home owner’s children can also own JV shares, they can benefit as an owner as well. This can also streamline the transfer of the asset to the children as that necessity may arise.
- Protects the market value of neighborhood homes. - Since the joint venture acquires the home at a market price, the surrounding property values are not adversely affected by the increased affordability of the home.
- Stops the devaluation of the housing stock and, therefore, avoids erosion of the tax base. - As in benefit #4, property values are stable because one or two distressed situations do not drag down the value of the surrounding properties.
Details available through your VA Assistant.