Governor Commends Teachers’ First Home Loan Program

Issuance of First Loan

Governor Jim Gibbons congratulated Brinley Middle School teacher James Pavlik as the first recipient of a Teachers’ First Home Loan, a program the Governor announced during his 2007 State of the State address.

The program is designed to help teachers purchase their first home, which should help the school districts attract and retain hard-to-recruit teachers, particularly those specializing in math, science and special education. Mr. Pavlik teaches 8th Grade science.

“We’re all very excited that Mr. Pavlik has been able to utilize this program to buy his first home,” Gibbons said. “As a teacher, he provides an invaluable service to our state, and hopefully, by being a homeowner, he will have more of a reason to stay and continue teaching in Nevada.”

Research indicates that teachers who maintain employment in a school district for more than three years are more likely to stay in that community and continue to teach there. The Governor launched the Teachers’ First Home Loan Program as an effort to help keep teachers in the individual school districts.

“This program really does help out teachers who are starting out,” Pavlik said. “I’m in my third year of teaching, and if I didn’t have this assistance right now, there’s probably no way I could purchase a home here in Nevada. It really makes it possible for me to buy a house.”

Under the program, Pavlik will receive monthly assistance for five years for a total loan amount of $15,000 that he will use to offset monthly mortgage payments. At the end of five years, he will be required to start paying back the loan over a fixed term.

The program requires that teachers complete ongoing education credits so that when it’s time to begin repaying the loan, their salary has increased enough to cover the loan payments.

The program is also coupled with the State Housing Division’s First Time Homebuyer Program, which offers below-market, fixed-rate loans and additional down payment and closing cost assistance.

“By packaging these two assistance programs together we’re able to provide a real path to home ownership for our teachers,” Gibbons said. “Especially during the current credit crunch, it can be particularly difficult to get a home loan. This program will help hundreds of teachers achieve that goal.”

The Nevada State Housing Division is working with human resources departments in the individual school districts to promote the loan program. Each school district receives applications for the loans, works with the teachers and ultimately decides which teachers should receive the loans.

About 20 additional loan applications are currently being processed. There is enough funding in the program to provide more than 250 Teachers’ First Home Loans. The funding is being allocated proportionally throughout the state based on student enrollment.

The loans are funded out of recycled loan proceeds. The original loans were issued with bond money in the 1980s to help rebuild neighborhoods damaged during riots. The bonds were all repaid with the loan proceeds, and the interest off those loans has provided the funding for the Teachers’ First Home Loans. As such, no taxpayer dollars are used in the Teachers’ First Home Loan Program.

 

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Legislative Committee Approves Budget Cuts

The Legislature’s Interim Finance Committee today approved 4.5 percent, across-the-board cuts to the current state budget to help meet the state’s ongoing revenue shortfall.

Governor Jim Gibbons originally directed the reduced spending levels in January to maintain a balanced budget, a requirement of the Nevada Constitution. A recent Attorney General’s opinion stated those cuts should be considered by the Interim Finance Committee, which approved them this afternoon during a special meeting.

“I’m glad that the Legislative panel members agree with these reductions,” the Governor said. “This is a fiscally responsible way to balance the state’s budget. Just like every individual, family and small business in Nevada, the state government needs to live within its means. Our Constitution requires that we maintain a balanced budget for good reason.”

The 4.5 percent cuts reduce state operating expenses by about $274 million over the course of the two-year budget cycle. The Legislators today approved $236 million of that total.

In previous budget negotiations with the Governor, Legislative leaders agreed to further reduce spending by delaying construction projects, utilizing the state’s Rainy Day Fund and tapping other reserves.

Overall, the Governor and Legislative leaders have agreed on a full package of spending reductions totaling $913 million.