Homeownership Assist Funds PATHMEMORANDUM
TO:
FROM:
SUBJECT:
September 30, 2003
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Application for Homeownership Assistance Funds
Housing and Community Development Department Director David Harris is
recommending sponsorship of an application for Affordable Housing Program Funds to
the Des Moines Federal Home Loan Bank to assist income-qualifying families to
purchase a home.
In 1998 and again in 2000, the Housing Services Department sponsored applications to
the Federal Home Loan Bank for a first-time buyer down payment assistance program.
These applications were approved in the total amount of $580,000. Our partner lending
institutions included Dubuque Bank and Trust, American Trust and Savings Bank,
Firstar Bank, Mercantile Bank, Premier Bank, Dupaco Community Credit Union and
East Dubuque Savings Bank.
In total, 63 loans were made to buyers earning less than 60% of area median income.
Matching funds committed to the lenders and buyers totaled more than $3.5 million. All
participating families were required to complete a series of homebuyer workshops and
financial counseling sessions, sponsored by the Dubuque County Extension Office.
Because demand for these classes exceeded Extension's staff capacity, each of the
lenders contributed funds to extend the part-time hours of the financial counselors. A
high degree of cooperation was also obtained from area appraisers and realtors. By all
measures, the program was a highly successful partnership, enabling many families to
realize their dream of homeownership who otherwise could not have qualified.
The application proposal will again target all lower-income households, with assistance
to 25 buyers, all earning less than 50% of area median income. Five-year forgivable
loans will be offered in amounts up to $4,000, for down payments, closing costs and
required rehabilitation work. Buyers will be required to contribute three percent of the
purchase price. Participating lenders will provide first mortgages for the balance of
financing.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Communib~ Development Department Director
MEMORANDUM
22 September 03
To: Mike Van ~il~gen, City Manager
From: David HarriS, Housing and Community Development Department
Re: Application for Homeownership Assistance Funds
Introduction
The purpose of this memorandum is to request the Mayor's execution of the
attached resolution, approving sponsorship of an application to the Federal Home
Loan Bank (FHLB) for Affordable Housing Program funds to assist income-
qualifying families to purchase a home.
Background
In 1998 and again in 2000, the Housing Services Department sponsored
applications to the Federal Home Loan Bank for a first-time buyer downpayment
assistance program. These applications were approved in the total amount of
$580 000. Our partner lending institutions included Dubuque Bank and Trust,
American Trust and Savings Bank, Firstar Bank, Mercantile Bank, Premier Bank,
Dupaco Community Credit Union and East Dubuque Savings Bank.
In total, 63 loans were made to buyers earning less than 60% of area median
income. Matching funds committed by the lenders and buyers totaled more than
$3.5 million. All participating families were required to complete a series of
homebuyer workshops and financial counseling sessions, sponsored by the
Dubuque County Extension Office. Because demand for these classes exceeded
Extension's staff capacity, each of the lenders contributed funds to extend the
part-time hours of the financial counselors. A high degree of cooperation was also
obtained from area appraisers and realtors. By all measures, the program was a
highly successful partnership, enabling many families to realize their dream of
homeownership who otherwise could not have qualified.
Discussion
We are again proposing an application for the October 2003 FHLB funding cycle.
All area lending institutions have been contacted and each has agreed to
participate. This year US Bank has joined as a partner. Dubuque Bank & Trust
has volunteered to serve as lead lender. The application will request $100 000.
The application proposal will again target all lower-income households, with
assistance to 25 buyers, all earning less than 50% of area median income. Five-
year forgivable loans will be offered amounts up to $4000, for downpayments,
closing costs and required rehabilitation work. Buyers will be required to
contribute three percent of the purchase price. Participating lenders will provide
tirst mortgages for the balance of financing.
All participating families will again be required to attend the homebuyer
workshops, sponsored by the County Extension office. The Housing Department
will inspect all homes, specify necessary repairs, authorize payments and
monitor rehabilitation activities. All AHP funds will be required to be expended
within a twelve-month timeframe. It is expected that announcement of the award
will be made by December.
As part of the application package, member Federal Home Loan Bank members
are encouraged to enlist the sponsorship of local area governments. The
Housing Department has convened the discussion among the lenders and has
proposed that City sponsorship again be incorporated within the project proposal.
The sponsorship must be endorsed by the City Council.
Recommendation
It is recommended that the Council endorse the attached resolution. This
program of homeownership assistance will complement existing programs
currently sponsored by the City, including the First Time Homebuyer Program,
funded with CDBG revenues, operating City-wide for households earning up to
80% of area median income.
The Affordable Housing Program grant - named PATH: Pathways Affordable to
Homeownership - will complement these activities by emphasizing assistance to
lower-income (below 50% mortgage revenue bond income limits) households,
incorporating rehabilitation assistance and making properties throughout the
targeted neighborhoods eligible for purchase.
As with all the Housing Department's lending activities, this program will serve to
enhance the existing partnerships the City enjoys with Dubuque's Lending
institutions. The participating banks will gain credit for federal Community
Reinvestment Act (CRA) activities in support of income-qualifying households.
And the City will continue to promote its objectives of providing assistance to
families seeking their dream of homeownership, while serving to revitalize the
downtown neighborhoods.
Action Step
The action requested of the City Council is to approve the Mayor's execution of
the attached resolution, in sponsorship of an application for Affordable Housing
Program funds to the Des Moines Federal Home Loan Bank.
367
RESOLUTION NO. 367-03
A RESOLUTION AUTHORIZING SPONSORSHIP OF AN APPLICATION
TO THE FEDERAL HOME LOAN BANK OF DES MOINES FOR AFFORDABLE
HOUSING PROGRAM FUNDS.
Whereas, the Federal Home Loan Bank has published notice of availability of
funds under the Affordable Housing Program; and
Whereas, local member FHLB lending institutions have agreed to submit an
application for these funds, for a program of homeownership assistance to lower-
income households; and
Whereas, the City's Consolidated Plan promotes the objectives of
homeownership assistance and stabilization of target neighborhoods; and
Whereas, prevision of homeownership opportunities to the City's working
families is a necessary complement to on-going economic development efforts.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA.
Section 1. The Mayor is hereby authorized to execute this resolution in
sponsorship of an application to the Federal Home Loan Bank for Affordable Housing
Program funds, to assist lower-income families to purchase homes.
Section 2. This resolution shall take effect immediately,
Passed, approved and adopted this 6th day of {October ~ 2003/~
Terrance M. Duggan, Mayor
Attest: Jeanne Schneider, City Clerk