by: Jodie Fleischer Updated:None —
With thousands of homes for sale across the metro area for $50,000 or less, you might think it would be a chance for renters to finally live the American dream, but a Channel 2 Action Nws investigation found it's mostly investors cashing in, where ordinary families can't.
Investors can typically afford to pay $20,000 to $40,000 in cash per house, where a family would need to secure a mortgage. Many banks are refusing to write mortgages that small.
"I would love it. Dream come true," said Peggy Pritchett, who's spent the past 2 1/2 renting a home in South Fulton County. She's spent nearly $25,000. If she had that cash all at once, she could have bought any one of 368 houses currently for sale in Fulton County.
"We never can calculate it because, there's other things going on. We have bills to pay. We have rent," said Pritchett.
Real estate investor RJ Morris told Channel 2 Action News investigative reporter Jodie Fleischer that he is trying to sell a home a block away from Pritchett's rental for $40,000.
"You know what your payment would be on a $40,000 loan? $160 a month! But there's the rub, banks say at $160 a month, we can't make money on that," said Morris.
He said he's had plenty of interest from families, but they don't have $40,000 in cash and would need to get a mortgage.
"No one could finance the loan, not because they had bad credit, but rather because the banks said we don't do any loans under $75,000," said Morris.
This year, 1,749 Fulton homes have sold for $50,000 or less. Only 4 percent of the buyers found banks that would give them a mortgage.
"They make the same percentage on a small loan that they do on a large loan of course, the amount is larger on a larger loan," says Laura Sosa-Rocha, a mortgage broker, who thinks that's why most of the larger banks just won't do it.
She works for Fidelity Bank, one of the only local banks that will grant smaller loans.
"I've had one person that had called 10 places before she called me," said Sosa-Rocha, "Everyone deserves a home in America, and if they can afford $50,000 or $30,000 then we will do the loan for them."
That would help neighborhoods transition away from rentals, if families could buy homes instead of investors. As of today, the north Georgia database lists 2,643 homes for sale for $50,000 or less.