Grand Forks gives initial OK for housing aid for new homeownersA Grand Forks City Council committee gave preliminary approval Monday to a new homebuyer assistance program slated to come on line in May with a budget of $420,000.
By: Brandi Jewett, Grand Forks Herald
A Grand Forks City Council committee gave preliminary approval Monday to a new homebuyer assistance program slated to come on line in May with a budget of $420,000.
The program would provide up to $10,000 in assistance for the down payment and closing costs of a home.
“Any time we’re helping a new homebuyer or a first-time homebuyer get into a house, it’s a good thing,” said finance committee chairman Dana Sande.
According to city staff reports, the assistance takes the form of a no-interest, deferred loan secured by a second mortgage. If the homeowner refinances the first mortgage, sells the home, or ceases to occupy it as a primary residence, the loan must be repaid to the city.
Community Development Manager Meredith Richards said the program’s goals would be to stimulate development, encourage construction of affordable homes and allow more low- and moderate-income people to become homeowners.
New and old
A number of changes were made to the program’s initial design before the committee approved it unanimously.
The program was brought forward by Richards as a new construction homebuyer incentive program. That means only those purchasing a new home and becoming its first occupants would be eligible.
After a short discussion, council members tweaked the proposal to include existing homes as well.
“People buying new construction will be the ones to take advantage of this,” Sande said. “But if someone wants to buy an old house, it doesn’t seem to hurt us.”
Eligible homes purchased under the program also were limited based on price, but council members agreed to remove the cap.
“We have a shortage of homes at all price points,” Sande said.
With the removal of the price cap, the committee opted to strike any additional funding for principal buy-down assistance at the request of Richards.
This latest homebuyer assistance program follows the city’s previous American Dream Program that was discontinued in 2012 due to lack of use.
The American Dream gave homeowners up to $5,000 in assistance for down payment and closing costs. The assistance was available to low- and moderate-income household members buying a home for the first time in Grand Forks.
The program proved unpopular and saw hundreds of thousands of dollars in carryover in its budget each year.
Council member Doug Christensen said making the new program simple will be the key to its success.
“That’s why the American Dream Program failed,” he said. “It was too complicated.”
Call Jewett at (701) 780-1108; (800) 477-6572, ext. 1108; or send email to email@example.com.