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Homebuilder will pay mortgage for 6 months if buyer loses job

By Jeff McDonald / The Bulletin

Published: March 26. 2009 4:00AM PST

Redmond-based Hayden Homes has a special deal for homebuyers who fear losing their jobs after they buy a home: It will pay the mortgage for up to six months if someone loses his or her job within two years of purchase.

The program — which will cover a mortgage up to $1,800 per month and includes certain qualifying conditions — is one way to remove obstacles for buyers in their decision to purchase a home, said Michael D. Hinton, vice president at Cornerstone Mortgage Group LLC in Bend, which operates as Hayden Homes’ mortgage company, Hayden Homes Mortgage.

And Hayden hopes the program will help increase sales in a tough market.

The program requires homebuyers put 10 percent or less down on their home, Hinton said.

“Our target market is first-time homebuyers,” he said. “Rates are good. Home prices are really good. The last thing that would prevent people from getting into real estate would be fear of job loss. This program fits our customer base really well.”

Homebuyers cannot be self-employed or be serving in the military, and the home needs to be a person’s primary residence, Hinton added.

The $1,800 monthly limit includes principal, interest, taxes and insurance, Hinton said. That, coupled with the maximum 10 percent down payment, would qualify a person to buy a home that would cost about $250,000, he said.

Hayden hopes its incentives entice homebuyers in a market where interest rates have fallen to record lows and Bend’s median home sales price dropped to $215,000 in February, down 32.3 percent from February 2008, according to an analysis of single-family home sales in Deschutes County produced by the Bend-based Bratton Appraisal Group.

Unemployment rates, meanwhile, are at record highs in Deschutes County, where the latest data released this week shows February joblessness was 12.6 percent, according to the Oregon Employment Department.

“What we are finding is in some of our markets like Bend and Redmond, many buyers are walking through the door, and they really want to buy and can afford to buy, but they are scared of losing their jobs,” said Deb Flagen, vice president of sales and marketing for Hayden Homes.

Hayden has between 12 and 15 homes on the market in Sisters, Bend and Redmond for which the company’s program will be available, Flagen said. The program also will apply to Hayden homes that have yet to be built, she said, adding that no program timeline has been established.

Last year, the company built 560 homes in Oregon and Washington.

In addition to mortgage protection, the program provides pre- and post-mortgage education and counseling for two years and provides financial assistance for unexpected emergencies such as medical expenses, Flagen said.

A similar program gained attention recently in the auto industry, where Hyundai is letting buyers return new cars if they get laid off within a year of purchasing their vehicles. The program was a model for Hayden Homes, Hinton said.

In Seattle, developers of a condo project have created a program where buyers’ mortgages will be paid for up to six months if they lose their jobs within a year of buying a condo, according to an article published Wednesday in the Seattle Times.

In another program to entice buyers, Walla Walla, Wash.-based Banner Bank is offering traditional 30-year fixed mortgages with interest rates as low as 3.875 percent to qualified borrowers. The rates are only available for homes that Banner or its subsidiary, Portland-based Community Financial Corp., financed. Some of the homes are in Bend and Redmond.

New homebuyers also can take advantage of an $8,000 tax credit if they buy their home by Dec. 1, 2009. The tax credit is part of the American Recovery and Reinvestment Act of 2009.

Jeff McDonald can be reached at 541-383-0323 or at jmcdonald@bendbulletin.com.

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