Incentives Draw Few L.A. Officers Into City

A year-old program aimed at enticing more Los Angeles police officers and firefighters to buy homes in the city they patrol is off to a sluggish start, statistics show.

Yet backers of the program--which offers financial incentives ranging from no-down-payment loans to debt counseling courses--say they’re satisfied with the progress so far.

“So many officers feel they’ll never be able to afford a home,” said Police Commissioner Dean Hansell, who spearheaded the project. “I’ve been very encouraged by the results.”

The Homes for Peace Officers and Firefighters program was prompted by a 1994 study that showed only 17% of the city’s police officers hang their hats in Los Angeles. To help reverse that number, it offers special financing deals on homes within Los Angeles to the city’s 9,650 police officers and 3,100 firefighters.

A year into the program, however, only 172 people from those groups have applied for the benefits and just 39 have bought homes in the city--and most of these officers were already Los Angeles residents.

Only 12 who lived outside the city limits have purchased homes with these subsidies, statistics show.

Hansell said helping officers who already live in Los Angeles buy homes in the city is just as vital as attracting nonresidents to move in.

“This keeps them in the city,” Hansell said. “Most of these people, if not all, are first-time homeowners. The benefit of that is they really have put down roots in the city.”

Sponsored by the Federal Home Loan Mortgage Corp. and the Federal National Mortgage Assn., also known as Freddie Mac and Fannie Mae respectively, the loan program is administered by the city housing department and offers a variety of incentives. They include no-money-down mortgages, some lower-than-market interest rates and deferred payment on closing costs.

Participants can secure loans of up to $240,000. Most of the loan options pose no risk to city taxpayers; the program’s direct costs are about $95,000.

Geoffrey Maye, a young firefighter who married in August, used the loan program to buy a four-bedroom, $210,000 house in Granada Hills.

Maye and his wife, Desiree Allen-Maye, were previously living with the fireman’s family in Koreatown but they nearly headed for the hills of Ventura County to find a home of their own.

“Everyone said Simi Valley is a nice place to be,” Maye said. “We were thinking that there’s nothing nice in the city of L.A., but we just needed to look around.”

The main challenge, the couple said, was scraping together enough money for the down payment. They came up with $4,000 of their own and borrowed $6,300 through the city’s loan program.

“For us, it worked out great,” Allen-Maye said. “I don’t think we would even be in a house right now without that.”

With the starting salary for police officers at about $41,000 per year, many wouldn’t otherwise be able to afford homes in a “safe, comfortable area” in the city, said Dennis Zine, secretary of the Police Protective League.

Still, he said, the approval process needs to be accelerated.

“If 172 people are interested and they’ve gone to the point of submitting applications,” Zine said, “they need to cut through some of this red tape.”

Others say the police and fire departments simply need to get the word out better, particularly to young officers leaving the police and fire academies.

“They did a little bit of advertising, but there’s been no follow-up,” said Jim Havassy, a senior vice president at American City Mortgage. His company and other lenders service the loans, which they sell to Freddie Mac and Fannie Mae.

When the program began, the city distributed fliers with officers’ paychecks, posted signs and made announcements at roll calls. Hansell said the city is planning another marketing push in January, including teaching academy recruits about their loan options and bringing loan officers into the workplace to make it easier to apply.

Some lenders have also tried to nudge the program along. Havassy said he has assigned two loan officers to contact dozens of police officers and firefighters who have been pre-approved for loans but have yet to buy homes.

“Sometimes people are motivated initially, but if they hook up with a Realtor who doesn’t show them what they want, they get discouraged,” he said.

But Rick Whitted, a loan officer at Chase Manhattan Mortgage Corp., said the program is too limited to have broad appeal.

“It’s off to a very slow start,” he said, adding that he’s had about 20 people apply just to find out how much they were eligible to borrow. They abandoned the program because of its restrictions, he said.

“None of them ended up buying homes in the city of L.A.,” Whitted said. “Where can you move into a nice neighborhood for $240,000?”

Hansell, for one, is still hoping to persuade 1,000 officers to buy homes in the city.

“I think the point is we’re trying to create a program that will be a permanent fixture,” he said. “If you look at the 172 who’ve applied, I think that’s not too bad. The hope is, obviously, that the majority of them will buy homes in L.A.”