President, Alpine Mortgage

Q: How did you become involved in The HELP Program?

The principles of The HELP Program asked me about doing some loans for less than perfect credit. We talked about some options for getting people into a house ahead of time before they are actually able to qualify for something and then as they repair their credit and are able to qualify for a loan then they can turn around and purchase the house at that time.

Q: How does the program work?

Well it’s for people with credit challenges that aren't able to qualify for a program right now, so they can't purchase a home. Either they don't have a down payment or credit scores that will allow them to qualify for the home purchase right now. The program will help them get into a house so that they can experience home ownership.  As their credit gets to the point where they can qualify then they get their own loan and buy the house back from HELP, the program that is helping them get into the house in the first place.

Q: Tell me about the typical HELP program client. Who typically comes in and applies for a program like this?

I think the better clients have been people that have had recent problems with their credit--either because of a bankruptcy or divorce or a lost job.  They are getting back on their feet with a good job and income and their credit is headed the right direction but its just not good enough for them to purchase the house yet. The people that seem to work out the best are people that have had credit problems that really weren't something that they couldn't foresee--medical, or other similar challenges—so their credit suffered and they aren't able to qualify. Those guys that pay their bills regularly and so their credit gets repair quickly enough that they are able to get their own home in six to eight months.

Q: What credit score would someone need to have to graduate from the program and get their own loan?

About as low as we can go is a 580 mid-score. If their credit scores are over 600 then their rate and terms can be a little better. It just depends on how much improvement they can make on their credit scores. When we try to do the loan for them if they have made a lot of improvement then the rate will be able to reflect that, if they haven't made quite as much improvement than the rate might be a little bit higher. We are able to help almost anyone over a 580 credit score.

Q: What's the difference in interest rate between someone who has, say, a 700 credit score versus a 600 credit score credit score?

The difference in rate is probably about 1% to 2% depending on how rough the different credit they have is. If they show a lot of job stability and income stability and their scores aren't quite as good then they are going to have a better rate than if somebody has an income challenge as well. There are also other factors besides the rate if somebody has an income challenge than there is an add-on to the rate as well as an add-on for a lower credit score too. So there are a lot of different things that will affect the rate.

Q: To get a new construction home right now in Boise, which is what The HELP Program does, what income would people need to have to be able to help qualify for the program?

The size of the house they are looking for will require a certain amount of income so if somebody is looking for $100,000 house then the income of $25,000 will carry a payment on a $100,000 house. If you are doubling that then you need to double the income as well. The more house a person is interested in buying, the more income they are going to have to have.

Q: So right now a pretty standard new construction home would be in the ball park of $225,000.What kind of monthly income would that need to have?

I would expect the monthly income would need to be around $4,000 just because there are other expenses that everyone has with cars and student loans and credit cards and those kinds of things that will also affect their debt ratio as far as being able to qualify for a house. So probably at least $4,000 a month.

Q: So lets say a client comes in with a credit score of 530-540 they get their credit repaired and they get up to about 600, they are making $4000-$5000 a month what kind of terms could they get right now when you are refinancing them to get their own mortgage?

If someone has reached a credit score of about 620 then they can qualify for pretty much all the regular Fanny May programs. If they want an adjustable rate of a fixed, long term fixed or short term fixed, they can qualify for most of those programs. If they're lower score than that the programs become a little more limited than that as far as, there may be pre-pay penalties and most of the people that we see in that credit score range go with an adjustable rate mortgage because the fixed rates for the lower credit scores, are quite a bit higher.

Q: How many HELP program deals have you done?

I think we have closed between 15 and 20 of these so far and we have had some really good success of people recovering from their credit problems. It has actually worked really well.

Q: 15 to 20 in what time frame?

It's been less than a year so we have been probably 6 to 8 months since we started actually closing them. They have been going pretty quickly.

Q: What is the average turn around time from someone walking through the door and just starting the program to owning their own home?

I would think it's between 6 and 10 months.  Some of them have been as long as a year and some of them have been as short as 2 to 3 months.

Q: Anything else you want to say about The HELP Program or about Alpine Mortgage you want to say that I haven't ask you about already?

I think The HELP Program is an exceptional program for people that have credit challenges. I think it is a great way to get into a house and be able to get your own loan down the road. You can get started on owning your own home right away rather than having to wait and so there are some good advantages to it.
At Alpine Mortgage we do our best to get people the best loan and the best rate on the terms that they can qualify for with the right fees that will help them get into the house. We have had some great success in pleasing the people that we do loans for.