Washington Neighborhood Guidelines and Funding SourcesTHE CITY OF Dubuque
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Masterpiece an the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Washington Neighborhood Financial Incentives Program
DATE: November 9, 2009
Housing and Community Development Department Director David Harris is
recommending revisions to the financial incentives program promoting Washington
Neighborhood homeownership.
This program currently provides a $5,000 forgivable loan for down payment assistance
to Washington Neighborhood homebuyers. The new program will provide an increase
in down payment assistance, to provide 20% of the purchase price, up to a maximum of
$15,000. The first $5,000 will still be provided as a 5-year forgivable loan. Up to an
additional $10,000 will be loaned, as a deferred payment, due-on-sale mortgage. The
buyer must contribute 3% of the home value as a down payment.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mich el C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindaht, City Attorney
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department Director
THE CITY OF Dubuque
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Masterpiece on the Mississippi
2007
TO: Michael Van Milligen, City Manager
FROM: David Harris, Housing and Community Development Department
SUBJECT: Washington Neighborhood Financial Incentives Program
DATE: 5 November 09
Introduction
The purpose of this memorandum is to advise the City Council of proposed revisions to
the financial incentives program promoting Washington Neighborhood homeownership.
Discussion
Currently, the Housing Department provides a $5000 forgivable loan for downpayment
assistance to Washington Neighborhood homebuyers. This assistance is provided to
buyers at all income levels, using a combination of CDBG, Iowa Finance Authority
Housing Trust Funds and City General Funds. While we have accomplished 23 new
homeowner purchases in the neighborhood since the initiative kicked off in 2005, we
have not yet achieved our goal of increased ownership by persons of more moderate
income. Only three of those loans have closed to-date.
Proposed is an increase in downpayment assistance, to provide 20% of the purchase
price, up to a maximum of $15 000. The first $5000 will again be provided as a 5-year
forgivable loan. Up to an additional $10 000 will be loaned, as a deferred payment,
due-on-sale mortgage. The buyer must contribute 3% of the home value as a
downpayment.
Recommendation
This increase is proposed in response to tightened lending and credit practices of
lenders, now usually requiring 20% downpayments, additional closing costs typically in
the $1500-2000 range, and private mortgage insurance coverage . It is recommended
that the City Council approve this revised policy for homeowner lending in the
Washington Neighborhood.
Washington Neighborhood Revitalization
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For additian al informaf~on contact:
Kris Nay~1 or ~dn P~#1.drC3~~t at 5€~3-S~B~3~
Heu~in~j ~d'~lil~l~'n~Aot~r C}~tl~~m~nt [3+tp~r~e~nt
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