Several years ago, Regina Smith couldn't even get a credit card.

But with perseverance, she moved up the ladder at Johnny J's Diner in Casper, where today she's the manager.

"I've worked really hard," she says.

Buying a new home was the capstone of her financial turnaround. But for awhile, it didn't look like she could swing it.

The single mom with three kids living at home learned what many prospectors have discovered in recent years - there aren't many newly constructed homes in Casper that fit her pocketbook.

"I just could not afford the huge payment," Smith said.

But thanks to a Wyoming Community Development Authority (WCDA) program, Smith will be trading in her mobile home for a brand new, three-bedroom house in Bar Nunn.

"I really thought it was too good to be true," she said. "But it's not."

Smith was able to take advantage of WCDA's Home Run programs, of which there are two variations. Both help make newly built homes more affordable, not by addressing construction costs directly, but by lowering the cost of borrowing money.

The idea is to subsidize the interest rate on a home loan, then allow the rate to increase progressively over time.

WCDA Deputy Director Cheryl Gillum said this should not be confused with an adjustable rate mortgage. That's because the interest rate will never exceed the WCDA fixed rate at the time the loan is made.

For example, the fixed rate on a standard WCDA loan is 5.875 percent. Under the Home Run I program, the interest rate would start at 2.875 percent for the first four years and then increase over time, but it won't exceed 5.875 percent over the 30-year life of the loan.

Accordingly, Smith will see her monthly payments for the principal and interest on her new $160,000 house increase from $710.26 to $823.99, but not go higher.

And with an annual income of $32,000, the 44-year-old Smith thinks that's a payment schedule she can live with.

"I'm sure we're going to be okay," she said.

While the Home Run I and II programs are similar, there are important distinctions.

The Home Run I program has a purchase limit of $160,000 in all counties, while the Home Run II program has a limit of $185,000. Home Run I also has lower income restrictions than Home Run II.

The subsidy for Home Run I is provided by the U.S. Department of Housing and Urban Development; WCDA subsidizes Home Run II through its general fund, Gillum said.

"What we're trying to do is just create some demand from home buyers," she said. "We're trying to create a little bit of push from the home buyer to build those smaller homes."

So far, it seems to be working. Gillum said the WCDA set aside $3 million for Home Run II subsidies - good for about $20 million in home mortgages - and she anticipates that will be exhausted by the end of the summer.

Business Editor Tom Mast can be reached at tom.mast@casperstartribune.net, or call 307-266-0574.