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SALT LAKE CITY -- Some of the people trying to take advantage of state grants for the purchase of newly built homes are getting an unpleasant surprise.
The $6,000 grants, made possible by Senate Bill 260, are available to people who get a fixed-rate mortgage on a house that has not previously been occupied. But Jonathan Hanks of the Utah Housing Corporation, which oversees the grant program, says at least one of those mortgages has fallen through because a major lender didn't want to back the loans. It happened last week.
Hanks says in one case, the borrowers went through without the grant because they were so far along in the process.
"It appears the problem is between mortgage brokers and some of their lending partners," Hanks said.
He says part of the hitch involves paperwork that could make some underwriters liable for problems such as overstated property values. He says the Utah Housing Corporation is working on ways to streamline that paperwork.
Over the past two weeks, Hanks says more than 150 grants have been committed, so it's been working very well. "But there's part of the population which is struggling to take advantage of the program," he added.
He says it seems like a temporary glitch that can be worked out, but people who hope to take advantage of their grants need to check with their mortgage brokers to ensure there are no concerns with the grant.
The grant money, $10 million, is part of Utah's share of housing assistance money from the American Recovery and Reinvestment Act. It's available to the first 1,600 homebuyers on a first come, first served basis.
E-mail: mgiauque@ksl.com
