About
the Community & Neighborhood Development Program |
About the Community & Neighborhood Development Program ||| Currently Funded Activities ||| Results ||| Proposal Qualifications and Process ||| Materials Available from Us ||| How To Contact Us
Expansion
of Homeownership Opportunities
See also: The
City of Madison's American Dream Downpayment Initiative (ADDI) Program
Preferences ||| Conditions ||| Activities
These activities expand homeownership opportunities and strengthen current neighborhoods through encouragement of affordable owner-occupied housing, home buying, and expansion of ownership/tenure options. These activities generally help improve both the affordability for purchase by moderate-income homebuyer households and/or the physical status of the housing stock available to first-time homebuyers. The active activities include various forms of alternative ownership such as rent-to-own, land trusts, self-help, downpayment subsidies, construction of new units, or renovation of housing stock for purchase. These activities address Objective B in the Five-Year Plan and are generally targeted to those households in the 50-80% of median range. The long-term target goal is to maintain or increase the rate of homeownership in the lower income non-University neighborhoods to 90% of the Citywide average for ownership. The national benchmark for ownership is a 68% average.
Funds will be targeted to the acquisition, construction or renovation of housing that will be made available to eligible households for purchase of the housing units. The Commission may use a portion of the funds available from certain funding sources (ADDI, HCRI) to provide downpayment and closing cost assistance in order to promote opportunities for first-time homebuyers or longer-term affordability.
The 2005 City objective is to help at least 67 households move into affordable ownership positions.
For information on how to submit a proposal in this category, click here.
The Commission will give preference to homeownership activities that are designed to assure a period of housing affordability that is greater than HOME affordability requirements, or create new units through new construction or conversion of commercial property to homeowner units.
Funds may be used
only for housing units which do not
exceed the HOME purchase price or value limit designated by the Federal
Department of Housing and Urban Development (HUD). For non-HOME funded
activities, CD staff may recommend and the Commission may approve individual
exceptions in cases involving hardship or in cases involving housing built
at part of the City's Inclusionary Zoning requirements.
The CD Office
will consider an investment of up to a level of $44,400 per housing unit
(approximately 24% of the HOME single-family value limit, a benchmark
standard that will change over time), and will evaluate all proposals based
on the activity's contribution and "value added" to increase the
housing stock, upon activity need, and availability of resources to
determine the appropriate level of funding. The CD
Office will give consideration to the higher end of this $44,400 limit per unit
when the proposal meets the preferences stated above (creates new units
through construction or conversion of commercial property to housing).
Activities which incorporate accessibility into the design or involve lead
paint reduction or assure housing affordability that is greater than HOME
affordability requirements shall be considered for amounts greater than
$44,400 per unit based on increased costs to provide these features, up to a
maximum total of $50,00 per unit.
This maximum sum of $50,000 per unit will include the total of all funds
provided by the CD Office including, but not limited to, CDBG, HOME, Housing
Trust Fund and TIF 10% set-aside. The CD Office may also offer a higher
amount per unit as temporary financing to reduce holding costs.
Activities
may not exceed a total secured funds-to-value
ratio greater than 115% from all sources. (Projects where a
community land trust serves as owner of the underlying land will be permitted to
meet a higher ratio of 125% secured funds-to-value ratio for the entire project
of land and property, or 150% of secured funds-to-value ratio for the land alone if the ground lease meets the conditions of affordability and 100% of
the full value of the land is secured by a mortgage to the City.) CD Office
loans retained in an assisted property for an individual household may not
exceed a loan-to-value ratio of 100% from all sources. The CDBG Commission
will establish additional policies on subordination and sales to
second-generation buyers of CD-funded properties.
A
minimum of 85% of all funds received shall be applied to capital
costs including acquisition and closing costs, rehabilitation,
labor and materials, design and engineering costs and relocation
costs. A maximum of 15% of the total CD Office funds received
may be applied to staffing and other service delivery costs.
Activities involving the training of lower income individuals and
which lead to employment or higher education may apply up to 50%
of funds to staffing, legal or other development associated
costs.
The CD Office shall secure its funding for capital costs with a mortgage in the form of a non-recourse loan. Funds will be provided in the form of a long-term deferred loan, payable upon sale of the property or change in the use of the property. The mortgage will require a repayment equal to the amount of CD Office funds invested, or the percent of appraised value which the CD Office funds represent in the value of the property, whichever is higher.
Ongoing / currently funded activities in this category include:
City CDBG: Housing Development Fund (Homeownership)
City CDBG: Housing Trust Fund
City CED Unit: Home-Buy
Common Wealth Development: Affordable Homeownership
Movin' Out, Inc.: Homeownership Program
Operation Fresh Start: Employment and Training through Rehab
Urban League of Greater Madison: Single Family Rent-to-Own Program
Continuing activities approved in prior years include Habitat for Humanity's Development of Low-Income Owner Housing, C-CAP's Northport Commons Housing Development, Movin' Out and Wisconsin Partnership's Twin Oaks Housing Development, and Madison Area Community Land Trust's Troy Court, Troy Gardens and Camino del Sol projects.
See also: The City of Madison's American Dream Downpayment Initiative (ADDI) Program
