Asheville City Council member Julie Mayfield had a very clear request for prospective homebuyers regarding the city’s new $1.4 million Down Payment Assistance Program. “Please come get this money,” she said. “We want to spend it and we want to put people in houses.”
The program, unanimously approved by Council members at their Feb. 26 meeting, offers no-interest loans of up to $40,000 for low- and moderate-income borrowers to make down payments on single-family residences within Asheville city limits. Loans will be funded by $1 million of the 2016 Affordable Housing General Obligation Bonds, $300,000 in Housing Trust Fund money and $100,000 from the Federal Home Loan Bank of Atlanta.
Paul D’Angelo, the city’s housing development specialist, noted that the use of bond funding for this purpose is an uncommon tactic that nonetheless makes strategic sense for Asheville. “It’s not something I’ve seen out there, and especially around North Carolina,” he said. Area nonprofit organizations such as OnTrack WNC, Mountain Housing Opportunities and Habitat for Humanity, he added, all support the program.
Eligible properties, D’Angelo continued, include condominiums and townhouses in addition to traditional single-family houses. “If there’s any developers out there listening, we’d love to see more condominiums and townhomes out there; they can be a more affordable product,” he said.
Council member Keith Young drew particular attention to the $500,000 set aside for individuals and families making less than 60 percent of the area median income, or $36,780 for a family of four. The remainder of the $1 million in bond funding, as well as most other city affordable housing initiatives, uses 80 percent of AMI as the income threshold.
“There is a chunk that is set aside to make sure that those who really need it can access it,” Young explained. He added that those funds will only be reserved through the end of 2021 before rolling into the broader program, which expires in October 2023.
An additional $400,000 is reserved for “community heroes,” full-time employees of the city of Asheville or Asheville City Schools who have been at their jobs for at least a year. To be eligible for the program, these borrowers can make no more than 120 percent of the AMI — $73,600 for a family of four — and must apply by March 2020.
Although the city will charge no interest or monthly principal payments on the loans, borrowers must repay the original amount, plus an additional amount tied to the property’s appreciation, if they sell their homes within 20 years of purchase. The appreciation payment decreases by 10 percent annually after that point, and the loan is completely forgiven after 30 years.
Originally slated for Council’s agenda of Feb. 9, consideration of the program was postponed so its language could be made clearer. Mayfield said developing the policy had been problematic but thanked staff members for their hard work in taking the idea through “really complicated waters” from its “messy” origins in the Housing & Community Development Committee.
The only member of the public to comment on the policy, Devinceo Priester, also expressed his support. “I feel real good that somebody is actually willing to give Asheville a chance,” he said.