WHEDA stops issuing new mortgages
The financial meltdown on Wall Street is hitting the state's biggest low-income mortgage lender.
The Wisconsin Housing and Economic Development Authority, or WHEDA, has suspended issuing new mortgages because it's having a hard time selling tax-exempt bonds to investors.
The income from the bonds is the source of money that the state loans out as mortgages to first-time homebuyers of low- to moderate-income status. WHEDA made $522 million in mortgages in 2007.
According to its Web site, www.wheda.com, Friday morning, the program is suspending rate locks (the mortgage rate locked in by homebuyers) "until the capital markets stabilize and WHEDA's access to low-cost capital is restored."
WHEDA will continue to accept pre-approvals, "in hopes that the capital markets disruption is short-lived."
WHEDA is also waiving pre-approval fees for applications received on or after Oct. 1, until further notice.
Pre-approvals are good for up to 12 months.
Loan interest rates through WHEDA hit 7.9 percent as of Friday, according to the rate structure update on the authority's Web site. Before financing dried up, mortgages were being written in the 6 percent range.
