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Down payment assistance available for some Gainesville homebuyers

POSTED: July 28, 2013 11:50 p.m.

The city of Gainesville can help nine homebuyers with a down payment for a house, said Chris Davis, Housing Division Manager.

The Department of Community Affairs awarded the city with $58,500 in down payment assistance for low- and median-income buyers, with $45,000 available to homebuyers. The goal of the program is to increase home ownership rates in lower income neighborhoods. Applicants must meet income and other criteria for the loan, which can be forgiven.

“I think a lot of people, the first thing they see is ‘The city’s going to help me buy a home,’” Davis said. “We don’t help buy the home, we don’t provide the funds to purchase the home, that comes from a bank or a lender. Obviously, you have to be qualified for a mortgage.”

The city’s funds help in making a down payment, which usually is required. The city offers a $5,000 flat fee to help cover the initial payment and closing costs.

There’s some criteria that applicants must meet: They must have a gross income of 80 percent or less of the area’s median income. The target income is from 30 percent to 80 percent of median income guidelines.

The house must be in census tracts within the city limits targeted for high levels of poverty, which includes much of the older areas. The applicant must also be a first-time home buyer and attend pre- and post-home-buying education classes.

“That’s the intention of the program, is to try to encourage the reinvestment in those areas,” Davis said. “That’s why we limit funding to those specific areas.”

In 2012, Gainesville was the only community in the state awarded down payment assistance funding, Davis said.

Since 2001, the city has helped 66 families, with the assistance totaling $459,571.

The targeted census tracts have a median household income ranging from about $31,700 to $45,000.

The U.S. Department of Housing and Urban Development has income guidelines for the Gainesville Metropolitan Statistical Area for this year, depending on the amount of people in the household.

A household of one who makes $12,400 is considered by HUD an extremely low income, and $33,050 is considered low. A family of four bringing in $29,450 is very low and is still considered low if the income rises to $47,150. An eight-person household earning $62,250 is 80 percent of HUD income standards.

The loan is entirely forgiven if the property buyers stay in the house for six years, Davis said. HUD documents show that the loan is forgiven at an annual rate of 16.67 percent. If the house is sold or transferred before six years, a prorated amount of assistance has to be repaid.

“It’s just incentive to encourage sustainability,” Davis said.

It’s first-come, first-served, Davis said. The homebuyer applies with a lender and the information is shared with the city. The city inspects the houses to ensure they’re in compliance with building codes.

“If you have to spend $5,000 immediately when you buy the home, obviously those folks have probably saved up some money to purchase the home, but that’s a huge, huge hit on their resources,” Davis said.

The city is advertising the program on TV18, the local government television channel, and plans to send out fliers soon.

Application forms are available by contacting Gainesville’s Community Development Department or online by clicking “applications/forms” at gainesville.org under the Community Development link.


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